Jeremy Corbyn's Labour vows to raise income tax for those earning more than £80k in General Election policy pledge

Lynsey Barber
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Labour's tax policy will hit higher earners (Source: Getty)

The Labour Party will raise income tax for those earning more than £80,000 per year ruling out a rise for anyone bringing in less than that.

The shadow chancellor John McDonnell will say the rise to fund public services will affect only five per cent of earners and the majority on low and middle incomes will be protected by a "personal tax guarantee".

The promise of no increase to income tax, personal national insurance contributions and the standard rate of VAT for those earning under the threshold comes after a major blow to the party in local elections and weeks before the nation heads to the polls in the General Election.

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"The Labour Party is now the party of low taxes for middle and low earners, while the Tories are the party of tax handouts for the super-rich and big corporations," McDonnell will say in a speech on Sunday.

But Labour's tax plans were accused of having "gaping holes" by the Tax Payers Alliance while rival parties dismisses the pledge.

"Pledging to not increase taxes sounds good but unfortunately there are gaping holes in these proposals that will leave taxpayers and small businesses worried," said chief executive of the group John O'Connell.

"A better way for the parties to demonstrate they are on the side of taxpayers would be to pledge to cut the overall tax burden and leave more money in the pockets of those who earned it."

The group said it left open the possibility of a rise in the national insurance contributions made by employers, while referring to earnings rather than income suggesting income from elsewhere such as renting a property or dividends would be excluded, as well as pensions.

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The Lib Dems on Saturday unveiled their own tax pledge to raise income tax for all earners by 1p to fund the NHS. The party's Treasury spokesperson Susan Kramer said: "John McDonnell has no credible plan for the future of our economy and no guarantee to employers that they won't be hit with a jobs tax."

The Conservatives has yet to outline its tax policy, but Prime Minister Theresa May has said there will be no VAT rise. A previous election pledge not to raise taxes forced the chancellor Philip Hammond into an embarrassing u-turn on a rise in National Insurance announced in the Budget.

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