Labour exposes Osborne's tax cut for bankers

New figures from the party show that 643 bankers earning more than £1m a year will receive an average of £54,000 from the cut in the 50p tax rate.

After a week dominated by welfare cuts, an area where public opinion favours the coalition, Labour is hoping to regain the political advantage tomorrow when the 50p tax rate is officially reduced to 45p. Polls have consistently shown that the public, including Conservative voters, are overwhelmingly opposed to the move and an increasing number of Tory MPs (such as Jesse Norman and Robert Halfon) recognise that the decision inflicted permanent damage on their party's brand. 

Labour has dubbed tomorrow "Tory Millionaires' Day" after calculating that the UK's 13,000 income millionaires will receive an average tax cut of £100,000 a year (nearly four times the median salary of £26,500). Now the party's number crunchers have produced some equally potent stats on the gains that the top earning bankers will make. Labour has calculated that 643 bankers, working in the UK's five major banks and earning more than £1m a year, will receive a combined tax cut worth at least £34.6m per year - an average of £53,775 per banker. Millionaire bankers in the state-backed RBS and Lloyds are set to get a tax cut of over £7.5m per year - an average of £63,686 each. In addition, the 40 highest paid senior bank executives will receive a tax cut worth almost £4m - an average of £99,694 each.

Chris Leslie, the shadow financial secretary to the Treasury said:

People on middle and low incomes, who are paying more in higher VAT and seeing their tax credits and child benefit cut, will be totally appalled at the size of this government's tax giveaway to highly paid banking executives.

While the average family will be £891 worse off this year because of tax and benefit changes since 2010, it cannot be right for David Cameron and George Osborne to give a huge tax cut to millionaires this weekend.

Forcing millions to pay more while millionaires pay less is the act of a government that is totally out of touch and consistently stands up for the wrong people. Bankers are getting a bonus from David Cameron and George Osborne, while Britain's families pay the price for their economic failure.

For Osborne, who was careful in the Budget to emphasise that the banks would not benefit from the reductions in corporation tax, the figures are a political headache. The Chancellor's consistent line is that the 50p rate was ineffective because the rich avoided it (in fact, as I explained here, it raised £1bn in its first year and would have gone on to raise more) but to most voters that sounds like an argument for clamping down on avoidance (as the coalition claims it is doing), not for cutting taxes for the highest earners. 

People walk past the Royal Bank of Scotland building in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Will Jeremy Corbyn stand down if Labour loses the general election?

Defeat at the polls might not be the end of Corbyn’s leadership.

The latest polls suggest that Labour is headed for heavy defeat in the June general election. Usually a general election loss would be the trigger for a leader to quit: Michael Foot, Gordon Brown and Ed Miliband all stood down after their first defeat, although Neil Kinnock saw out two losses before resigning in 1992.

It’s possible, if unlikely, that Corbyn could become prime minister. If that prospect doesn’t materialise, however, the question is: will Corbyn follow the majority of his predecessors and resign, or will he hang on in office?

Will Corbyn stand down? The rules

There is no formal process for the parliamentary Labour party to oust its leader, as it discovered in the 2016 leadership challenge. Even after a majority of his MPs had voted no confidence in him, Corbyn stayed on, ultimately winning his second leadership contest after it was decided that the current leader should be automatically included on the ballot.

This year’s conference will vote on to reform the leadership selection process that would make it easier for a left-wing candidate to get on the ballot (nicknamed the “McDonnell amendment” by centrists): Corbyn could be waiting for this motion to pass before he resigns.

Will Corbyn stand down? The membership

Corbyn’s support in the membership is still strong. Without an equally compelling candidate to put before the party, Corbyn’s opponents in the PLP are unlikely to initiate another leadership battle they’re likely to lose.

That said, a general election loss could change that. Polling from March suggests that half of Labour members wanted Corbyn to stand down either immediately or before the general election.

Will Corbyn stand down? The rumours

Sources close to Corbyn have said that he might not stand down, even if he leads Labour to a crushing defeat this June. They mention Kinnock’s survival after the 1987 general election as a precedent (although at the 1987 election, Labour did gain seats).

Will Corbyn stand down? The verdict

Given his struggles to manage his own MPs and the example of other leaders, it would be remarkable if Corbyn did not stand down should Labour lose the general election. However, staying on after a vote of no-confidence in 2016 was also remarkable, and the mooted changes to the leadership election process give him a reason to hold on until September in order to secure a left-wing succession.

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