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Sir Keir shouldn not worry about Ms Abbott and other members of the Corbynite Left that have come down hard on his Budget stance, Express.co.uk has been told. It comes as the Labour leader opposed Chancellor Rishi Sunak’s decision to increase corporation tax in what has flipped Britain’s traditional political dynamic. Labour has historically voiced outrage when the Conservative Party has refused to increase tax on some of the country’s wealthiest businesses and individuals.
This was especially true during former leader Jeremy Corbyn’s time in opposition, when shadow frontbench figures like Ms Abbott and John McDonnell repeatedly attacked the Tories’ business-oriented Budgets.
This year, much of Labour’s radical element praised Mr Sunak for his decision to increase tax on those who have benefited during the coronavirus pandemic, turning on their own leader for opposing it.
Ahead of the Budget, Ms Abbott called-out Sir Keir on Twitter, reminding him of one of his leadership campaign pledges, and wrote: “Campaigning for UK Labour leadership, Keir Starmer pledged to ‘reverse the Tories’ cuts in corporation tax… no stepping back from our core principles’.
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“Now he opposes putting up corporation tax.”
However, Paul Embery, a leading trade unionist and Labour member, said Sir Keir should not worry about the likes of Ms Abbott, Mr McDonnell and Richard Burgon, who, he said, were “out of touch with millions of working class people” the party is meant to represent.
He said: “There are certainly tensions there but I don’t think Starmer should be worried about the hard Left element.
“In many respects we shouldn’t be too unduly concerned with what they’re demanding because many of them were the architects of Labour’s annihilation at the last general election; they’re the people who have helped to deliver and add more to the Tories because of their ideology, because they’re just not in touch with millions of working class people.
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“Their priorities are so out of kilter with those working class communities, and so I think Starmer can afford to do this.
“I don’t think he should ignore them, but he shouldn’t lose any sleep over their gripes and groans at the moment.”
Mr Sunak increased corporation tax to 25 percent , a rate that will come into force in 2023.
While this means the UK maintains its status as having the lowest rate in the G7, many fear it could stop businesses from reaching their full recovery potential, creating jobs and opportunities for the millions who have become unemployed.
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Mr Sunak assured that only businesses with profits over £250,000 will be taxed at the new price, meaning “only 10 percent of all companies will pay the full higher rate”.
Sir Keir and the shadow Chancellor Anneliese Dodds rejected the hike on the basis that they believe it will stifle economic growth, punishing businesses that have been hardest hit.
Ms Dodds has claimed that Mr Sunak is only increasing the tax in order to drive it back down before the 2024 general election.
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And while many have hit-out at the pair’s position, Steven Fielding, Professor of Political History at the University of Nottingham, told Express.co.uk that it was “defensible” given the economic state of the country.
He said: “Tax rises always depend on circumstances.
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“Starmer has argued that corporation tax shouldn’t be hiked immediately, but should be done when appropriate; given where the British economy is now, his argument is that the Government shouldn’t be taking money out of the economy.
“Ultimately, it’s a deflationary measure, and the last thing any part of the economy needs is deflation, because it’s already in a recession.”