Keir Starmer guilty of ‘shameful betrayal’ if he forces own MPs to vote against tax hikes

Keir Starmer is in 'big trouble' with Labour voters says Bridgen

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Chancellor Rishi Sunak is due to announce a pathway to raising corporation tax from 19 to 25 percent over the course of this Parliament. It is believed he will use the budget to “level with” the public about public finances in the wake of the coronavirus pandemic.

But Sir Keir is set to face a party crisis if he forces MPs to vote against the planned tax rise.

MP Jon Trickett launched a scathing attack after Sir Keir declared it was not the time to increase the burden on families and businesses.

Mr Trickett, a frontbencher under former leader Jeremy Corbyn, said: “Voting against tax rises on some of our largest companies would be a shameful betrayal of Labour’s time-honoured principles.

“At a time when so many key workers are having a wage freeze, it is entirely right to increase taxes on large companies, especially as some of them have made profits out of the pandemic.

“Opposing it would be something that hard-pressed communities in the North would not understand.”

Ed Miliband, the shadow business secretary, previously backed moves to increase UK corporation tax.

During Prime Minister’s Questions on Wednesday, Sir Keir said: “Now is not the time for tax rises on families and businesses.”

The shadow Treasury minister James Murray told the BBC the party would not back any tax rises.

He said: “We’re in the middle of an economic crisis, and this is not the time to do it.

“If you have a country where businesses are closing, where people don’t have money to spend in the economy and where you haven’t got investment going into public services and infrastructure, that is no way to get the country back on its feet.”

Labour MP Stella Creasy urged Labour to always back ways to make the system fairer.

She said: “A fairer tax system was our ambition before the pandemic, and will be critical to our recovery after as we pick up the pieces.

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“We’ve seen several major corporations make substantial profits as a direct consequence of the pandemic – the same companies who will also benefit from the impact of government support getting those who have been hit by redundancy and debt back on their feet.

“But for that to happen those schemes need to be funded now to stop any more families and small businesses from going under.

“It’s right that we look at our corporation tax rates and capital gains taxes and ask how and when those with the broadest shoulders can contribute a bit more to the task of rebuilding our nation.”

Labour softened its position and said it would back a steady minimal increase later in Parliament.

A source told The Guardian: “Let’s look at what the chancellor brings forward: if he’s talking about corporation tax going up gradually across the parliament to an OECD average, that’s one thing, but we don’t think there should be tax rises right now where the focus should be supporting business investment and growth.”

Three other shadow cabinet sources said the party backed the approach to oppose a corporation tax hike.

One said: “We’ve said for months we will oppose any rise in this budget and it’s consistent with what we’ve been saying that tax rises now will stifle our recovery.

“The Tories are turning their backs on business and under new leadership there is a new relationship with business.”

According to The Times, Mr Sunak is expected to announce plans for a one percent rise in corporation tax in the autumn.

Mr Sunak is likely to announce a “stealth tax” by freezing the lifetime allowance on pensions.

This is the amount people can build in their pension pot before incurring punitive charges.

Mr Sunak is also believed to freeze the £50,000 threshold for the higher rate of income tax in a move that will raise £1billion as 800,000 people will be forced to pay the 40p rate.

The Chancellor’s budget is also expected to include giveaways such as an extension to the stamp duty holiday, the furlough scheme, and coronavirus business support.

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