Labour’s “self-destructive” manifesto will drive billions out of the UK, leaving everyone in the country poorer, business groups, lawyers and think tanks have warned.
Jeremy Corbyn unveiled his “radical” vision for how a Labour government would tackle inequalities in Birmingham earlier today.
Among the changes revealed in the manifesto in order to fund £83bn of promises are plans to tax capital gains at the same rate as income, which itself would be hiked for high-earners.
Labour will also include stamp duty on City trading, imposing VAT on private schools and a windfall tax on oil companies.
But the party’s pledges have been met with resistance from many concerned about the impact such measures would have.
Matthew Lesh, head of research at the Adam Smith Institute, said: “Jeremy Corbyn’s little red book is the most backwards-looking, self-destructive manifesto in Labour’s history.
“Tens of billions of pounds in higher taxes will scare away entrepreneurs and red tape that will strangle business of all sizes. Everyone will be poorer. Labour is on nobody’s side.”
A spokeswoman for energy giant SSE also slammed the party for its divisive approach.
“This is a time for working together now to tackle the climate crisis, not waste years attempting a very costly, complex and controversial nationalisation,” she said.
Adam Marshall, director general of the British Chambers of Commerce, also warned Labour against taking a combative approach to business.
“No government can deliver the prosperity that people and public services depend on, or achieve net-zero, without a true partnership with business,” he said. “But command and control isn’t the way. Excessive intervention in business governance and sweeping tax rises would suppress innovation and smother growth.”
Craig Kemsley, head of tax at legal firm Calibrate Law, said: “An exodus of wealth from the UK is already well under way and Labour’s populist tax plans will only catalyse this phenomenon.
“Our analysis shows that since 2017, 10,000 additional income tax rate payers have left the country for good. There are only 393,000 such taxpayers in the country, but they provide around one third of the total income tax take.
“If this leak turns into a flood, then the winners will be the UK’s rivals who are welcoming them with open arms. The losers will be the rest of the UK who will have to pick up more of the bill for the political parties spending promises.”
Helen Morrissey, pension specialist at Royal London, gave a cautious welcome to some of Labour’s pension reforms, particularly improving access for those on low incomes and the self-employed.
“However, others, such as the pledge to leave the State Pension Age at 66 and to compensate the 1950s women are likely to cost many billions of pounds and with no money set aside to meet these commitments it will be difficult to see how they can be funded,” she said.
AJ Bell’s senior analyst Tom Selby also raised questions over some of Labour’s assumptions – namely that the party’s “gargantuan promise” to freeze state pension age increases appeared to be uncosted, and that Labour was “wrong” to say there has been a decline in life expectancy.
“The increase in the state pension age to 66 currently underway is the first increase since the Second World War, during a period when life expectancy across the UK has risen at unprecedented levels. If state pension increases are to be permanently shelved, Labour needs to explain who will pay the extra cost in the long-term.”
John O’Connell, chief executive of the TaxPayers’ Alliance slammed the manifesto as a “cocktail of dangerous nonsense”, saying it underscored how “many politicians either do not have a clue, or willfully ignore, how their sixth-form socialism will cause untold damage in the real world.
“Hiking taxes and seizing property will mean abject misery for millions of British families and businesses – if some of these plans are implemented, we can kiss goodbye to the investment we need for post-Brexit prosperity”.
O’Connell added: “It’s also crucial to remember that as well as the overtly sinister threats to seize property, promising the earth to everyone is morally repugnant, as it simply means we are passing the buck to future generations and ensuring our children and grandchildren will face huge tax bills indefinitely.”
Main image: Getty