Anneliese Dodds grilled over corporation tax by Ridge
Sir Keir is facing a showdown with the radical elements of his party as he looks set to oppose the Government’s corporation tax hike, Express.co.uk has been told. It comes ahead of Chancellor Rishi Sunak’s Budget announcement on Wednesday, that will take place after Boris Johnson’s Prime Minister’s Questions. He is expected to announce a string of tax hikes aimed at filling in the “black hole” which has plagued the UK as a result of the coronavirus pandemic.
A rise in corporation tax is among the most controversial.
Sir Keir now faces a potential split over his decision to confront Mr Sunak’s plans to immediately raise corporation tax.
Members of the Labour leader’s top team have said they were blindsided when he suggested his position on the proposal late last month.
Now, a group of “Corbynite” agitators are lining up to “attack” Sir Keir as they fear he is leading the party astray from its core, left-wing principles, according to Steven Fielding, Professor of Political History at the University of Nottingham.
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He told Express.co.uk that while Sir Keir’s opposition was understandable, it could prove an “inconvenience” to his leadership.
Professor Fielding said: “This corporation tax thing is an inconvenience in the sense that everybody in the Labour Party thinks tax rises good, tax cuts bad.
“Starmer’s position, currently, is quite sensible economically, but that doesn’t mean many people in the Labour Party will get on board.
“Certainly those who want to cause trouble will do that.
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“The people that have piped up are the alienated, hyper-Corbynites – they’re the ones currently attacking him.
“But they’re going with the grain of what most people in the Labour Party think: That any tax rise is good in any circumstances.”
Shadow Chancellor Anneliese Dodds has since confirmed that Labour will not back an immediate hike in taxes on company profits in Wednesday’s Budget.
Of the Corbynite MPs Prof Fielding referred to, former Shadow Chancellor John McDonnell recently called for a Covid windfall tax, while Richard Burgon took to Twitter to demand a tax on “those that have made super-profits out of this crisis”.
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At a recent rally organised by the Labour Assembly Against Austerity, with MPs and trade union general secretaries, Mr Burgon said: “We can’t just sidestep big debates when they happen.
‘The tax debacle of the past few days shows that if we continue to do so, then our party will be outflanked by the Tories with their phoney rhetoric of levelling up.
“We can win the argument for a progressive tax system – but only if we make the case.”
Sir Keir appears to have caved-in to these calls to a degree, having this week said that while he won’t support the initial hike, Labour is “open-minded” about future increases.
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Ms Dodds has accused Mr Sunak – who is tipped to increase corporation tax from 19 percent to 25 percent by the end of Parliament in 2024 – of playing politics with early tax hikes.
According to The Guardian, the Chancellor has “bragged he would later cut (corporation tax) in the parliament as a pre-election sweetener”.
At a video speech hosted by Bloomberg on Monday, Ms Dodds said Mr Sunak and the Government should be focused on supporting business to create more jobs in a time of mass unemployment.
She said: “Now is not the time for immediate tax rises.
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“We’ve been very clear that right now the Chancellor should be focused on promoting jobs, on ensuring that business can keep going, on getting people who are unemployed speedily back into work.”
Meanwhile, on winning the Labour leadership last April, Sir Keir announced ten pledges he would use to get the party into Downing Street.
The first, “economic justice”, promised to, “increase income tax for the top five percent of earners, reverse the Tories’ cuts in corporation tax and clamp down on tax avoidance, particularly of large corporations. No stepping back from our core principles.”
Aside from this, he has already backtracked on pledge number six, to “defend free movement as we leave the EU”.