As published on economia.icaew.com, Thursday November 7, 2019.
Boris Johnson used the front page of the Telegraph to accuse Labour of taxing all income brackets – not just billionaires. Corbyn countered the claim, saying that he specifically plans to target wealthy tax dodgers.
At a rally in the marginal seat of Telford, Shropshire, Corbyn spoke of the “moral obligation” to pay a fair share of tax “however rich, powerful and famous you are”.
“One day you might have a heart attack”, Corbyn said. “Then you’re going to need the public services”.
Under his leadership, a Labour majority government would “chase down” tax dodgers, he said.
“My personal views on billionaires is that they’ve obviously got a great deal of money therefore they’re in a very strong position to pay a lot more tax”, Corbyn said.
“So our plans will affect the richest 5% of our society. We will be chasing down tax evasion, tax avoidance and tax havens because at the end of the day if you’re doing some very clever wheeze, which somehow or other is avoiding your levels of taxation, you should be paying.
“Go further away [and] what happens then? You’ve got an underfunded school, hospital and public services as a whole”.
Earlier this year it was announced that a third of Britain’s billionaires – of which there are around 90 – live in tax havens.
Around 12,000 UK businesses are controlled from headquarters in low-tax jurisdictions.
At the time, the head of inequality for Oxfam, Rebecca Gowland, commented that “there’s something seriously wrong with a system that allows a very wealthy few to dodge paying their fair share at a time when 14 million people are living in poverty in the UK”.
Labour is also planning to more than double the amount it would borrow in its first term, the shadow chancellor John McDonnell has said.
The front-loaded spending pledge takes Labour’s promise for a national transformation fund to £400bn in a decade.
The government has responded to the pledge, accusing Labour of “fantasy economics”.
However, the government’s own spending pledges would see the largest funding increase for public services in 15 years. According to the think tank the Resolution Foundation, this would amount to 41.3% of GDP by 2023/24.
From the late 1980s to the financial crash of 2008/9, the average spending level was 37.4% of GDP. Between 1966-1984, average spending was 42% of GDP