‘Debt would PILE’ Labour accused of plotting to send taxes and borrowing SOARING

LABOUR was accused of plotting to send taxes and Government borrowing soaring today after the party’s treasury spokesman called for £17billion a year to be splurged on public services.

Setting out his economic blueprint ahead of next week’s Budget, Shadow Chancellor John McDonnell demanded pay rises across the public sector and massive increases in spending on the NHS, social care, schools and local councils.

He also proposed an immediate “emergency budget” to end the era of “austerity”.

The Shadow Chancellor – a key ally of Labour’s hard-Left leader Jeremy Corbyn – claimed the huge spending hike could be funded by extra borrowing, a crackdown on tax avoidance and higher taxes on big businesses.

But Tory Treasury minister Liz Truss warned his plan would vastly increase Treasury debt, piling up swingeing tax rises for ordinary families for years ahead.

Ms Truss, the Chief Secretary to the Treasury, said: “The shadow chancellor has today admitted Labour would borrow billions more and hike up taxes to record levels.

“The costs would rack up and up, putting economic growth at risk and hitting ordinary working people in the pocket.”

Senior Tory backbencher Peter Bone added: “Goodness knows what would happen to the economy if John McDonnell was the chancellor.

“It is an extraordinary admission.”

Tory Liz Truss and Labour John McDonnell

Tory Treasury minister Liz Truss and Shadow Chancellor John McDonnell

And Lib Dem leader Vince Cable, said: “Labour’s spending plans were pulled apart by the Institute for Fiscal Studies during the general election and it appears the shadow chancellor is still not properly costing his ideas.

“Over-assumptions of tax take are a feature of Corbyn and McDonnell’s Labour and would pile debt on future generations.”

Mr McDonnell today set out Labour’s spending plans ahead of Chancellor Philip Hammond’s Autumn Budget, due to be unveiled next Wednesday.

In a BBC interview, the Shadow Chancellor said a Labour government would spend £17billion more every year on public services than Theresa May’s administration.

McDonnell and Jeremy Corbyn

Mr McDonnell is a key ally of Labour’s hard-Left leader Jeremy Corbyn

“Now is the time to borrow while interest rates are so low,” he said.

And in a speech in central London about Labour’s plans, Mr McDonnell accused the Government of using the financial crisis as an excuse to squeeze working households while cutting tax for corporations.

“The great lie behind austerity was that we had no choice – that cuts were essential because there was no money,” the Shadow Chancellor said.

“This is a wealthy country, one of the richest in the world but that wealth is held in too few hands, and spent for too little purpose.

Lib Dem leader Vince Cable

‘Over-assumptions of tax take would pile debt on future generations’, said Mr Cable

“Even as they have been cutting public services to the bone, they have been offering huge giveaways to the mega-rich and giant corporations.

“Tax cuts introduced for both since 2010, including Corporation Tax and Capital Gains Tax, will cost us over £70bn over the next five years.

“Every single penny lost in these tax cuts means less money for our public services.”

Calling for an emergency Budget to radically change the Government’s tax and spending approach, the Shadow Chancellor said: “There is a better way than this but it needs a complete break with past failures.

John McDonnell

Mr McDonnell proposed to end the era of ‘austerity’

“The Chancellor has the opportunity next week to address the worst consequences of his austerity programme.”

He added: “The Government must end the public sector pay cap, and do so right the way across the public the sector.”

Mr McDonnell said Labour’s £6.5billion target for cutting tax avoidance could be raised following the leak of the so-called Panama Papers detailing assets held by wealthy investors in tax havens.

He said: “We want the Chancellor to bring forward the funding needed to make sure that every part of our country benefits.

“The infrastructure investment needs to address and close the regional funding gap, and to begin to realise the potential that is out there.”

 

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