Labour’s shadow chancellor John McDonnell has this morning defended his party’s plans to reverse corporation tax cuts and increase tax on high earners.
McDonnell was grilled on BBC’s Breakfast show regarding the suggestions from the Institute of Fiscal Studies (IFS) that such changes would affect all individuals.
The 68-year-old said there was “no evidence” that higher taxes on businesses would result in lower wages.
He also said that wages would be protected under Labour’s plans to strengthen trade union rights and have workers represented on company boards.
It comes after the IFS warned that Labour’s tax plans would “push the tax burden well above levels sustained in the UK since the Second World War.”
The IFS said on corporation tax alone, it would make it higher as a fraction of national income than any other country in the G7 and more than almost anywhere else in the OECD.
When questioned on BBC Radio 4, McDonnell denied that Labour’s policies would deer foreign investment in the UK.
He insisted Labour’s taxation of businesses will be “competitive with the rest of the world”.
“We’ll ensure that there’s long-term stable investment opportunities in this country, which actually international investors and companies are begging for at the moment,” he said.
“We’ll have the infrastructure that they desperately need to ensure that their investment gives them a good rate of return.”