One of the most contentious issues in the past few years has related to the ways in which some of the world’s largest businesses have paid reduced rates of tax by exploiting legal loopholes in the system, and Labour have decided that enough is enough.
In a speech delivered by newly-appointed Shadow Chancellor John McDonnell at the Labour party conference in Brighton, it was announced that the party that is now under the leadership of Jeremy Corbyn would look to retrieve around £25bn in corporate tax avoidance from the likes of Google, Vodafone, Amazon and Starbucks to name just a few.
There is currently an annual budget deficit of £95bn and the move to make the major companies pay “their fair share” of taxes is just one way in which Labour intend to cut that deficit. My McDonnell said that the party intend to make cuts, but “not in the ways that the current government intend to.”
He announced that Labour would “target subsidies given to companies and landlords and cuts to poverty-paying bosses, instead of the 1% pay-freeze on public sector workers and cuts to benefits and tax credits” that were recently revealed by the current Chancellor George Osborne.
Mr McDonnell went on to say that ““Labour’s plan to balance the books will be aggressive. There will be cuts to tackle the deficit but our cuts will not be to the number of police officers on our streets or nurses in our hospitals or teachers in our classrooms like the current regime.
“They will be cuts to the corporate welfare system. There will be cuts to subsidies paid to companies that take the money and fail to provide the jobs. Cuts to the use of taxpayers money subsidising poverty paying bosses.”
He finalised the speech at the conference by saying “Where money needs to be raised it will be raised from fairer, more progressive taxation. We will be lifting the burden from middle and low-income earners paying for a crisis they did not cause.”