Labour revolt after McDonnell says he WON’T block Budget tax cuts

Labour revolt after John McDonnell says he WON’T try to block Budget tax cuts despite claims they mainly benefit the better-off

  • Chancellor Philip Hammond unveiled billions of pounds of tax cuts yesterday 
  • John McDonnell has insisted he would not try to block the surprise measure
  • Labour figures have condemned stance saying cuts benefit the better off 

John McDonnell is facing a Labour revolt today after he insisted he will not try to block Budget tax cuts for millions of workers despite claims they mainly benefit the better off.

The shadow chancellor said he would not reverse changes that benefit higher earners because they added ‘demand’ to the economy and people like head teachers have had a ‘rough time’ in recent years.

But senior Labour figures accused him of backing perks for the wealthy while there are ‘people dying on British streets’.

Andy Burnham, mayor of Greater Manchester, said when he heard that the party ‘would be backing Philip Hammond’s tax cuts for the richest’ it sent a ‘shiver down my spine’.

Shadow chancellor John McDonnell (pictured in the Commons today) said he would not reverse changes that benefit higher earners because they added ‘demand’ to the economy and people like head teachers have had a ‘rough time’ in recent years

Tottenham MP David Lammy was among the senior figures condemning the party’s stance

In an article for The Times, he wrote: ‘I honestly can’t see how Labour’s position will hold. It is not just that the distribution is so unfair.

‘I can’t see how tax cuts for the wealthiest can be the top priority when our police are so stretched and there are people dying on British streets for want of a roof over their head.’

Former work and pensions secretary Yvette Cooper tweeted: ‘People on £90-100k a year will get tax cut worth GBP860 in April, those on £125k will get £600 – far more than low-paid workers, at a time when child poverty is going up, benefits are being cut, vital council services are being cut, police are badly overstretched. This is wrong. I cannot support it.’

Tottenham MP David Lammy said: ‘We shouldnot be supporting tax cuts that disproportionately help the wealthy.’ 

Analysis by the Resolution Foundation think tank showed the tax cuts would ‘overwhelmingly benefit richer households’, with almost half (45%) set to go to the top 10% of households.

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The cuts were criticised as ‘tax cuts for the rich’ by shadow foreign secretary Emily Thornberry on Monday.

Mr McDonnell told BBC Radio 4’s Today programme that Labour would support the tax cuts on the basis they would ‘inject some demand into the economy’.

‘What we’ve said is we will leave those personal allowances at whatever we inherit but our focus will be on a fair taxation system,’ he added.

Mr McDonnell later defended his decision to back Mr Hammond’s income tax cuts.

He said: ‘We are not going to oppose it on the basis it will put more money in people’s pockets.’

The shadow chancellor said Labour would make the top 5% ‘pay that bit more’.

He added: ‘We are not going to take funding away from people. Some of these are middle earners, we’re talking about head teachers and people like that who have had a rough time as well as everyone else.’

Manchester Mayor Andy Burnham delivered a stinging attack on the proposed tax cuts

Chancellor Philip Hammond unveiled the surprise tax cuts in his pre-Brexit Budget yesterday afternoon (pictured)

The personal allowance and the higher rate threshold will rise from April in a move the Chancellor said would mean ‘a tax cut for 32 million people’.

The personal allowance, which is the minimum income someone can earn before paying tax, will rise to £12,500 from £11,850.

The higher rate threshold, the income at which someone becomes liable to pay the 40 per cent tax rate, will rise to £50,000 from £46,350 at the same time.

Torsten Bell, director of the Resolution Foundation, tweeted: ‘Labour says it will support the income tax cuts announced yesterday – almost half of which goes to the top ten per cent of households alone.

‘Nearly 90 per cent goes to the top half. Not a good idea.’  

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