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31 October 2018

PMQs review: Jeremy Corbyn hands Theresa May victory by walking into a tax trap

The Labour leader blundered by condemning the tax cut that John McDonnell refused to oppose. 

By George Eaton

There was no mystery over the attack line for Jeremy Corbyn to deploy at today’s PMQs: austerity isn’t over. The Labour leader started well, quoting IFS head Paul Johnson on the cuts unprotected government departments (those outside of the NHS, international development and defence) will still face: “​If I were a prison governor, a local authority chief executive, or a headteacher I would struggle to find much to celebrate in the Budget. I would be preparing for more difficult years ahead.”

The government, Corbyn declared, had delivered a “broken promise Budget”. He later cited the continuing benefits freeze (so that welfare payments do not rise with prices) – another instance of austerity. But the Labour leader then gifted Theresa May a retort by complaining that the government “instead brought forward a tax cut for higher earners”.  

Yet, as the jeers from Tory MPs suggested, only yesterday John McDonnell announced that Labour would not oppose the increase in the 40p tax threshold from £46,350 to £50,000 next year. The shadow chancellor, May noted, had defended the windfall for “middle earners, head teachers and people like that”. Would Labour, she asked Corbyn, now support the tax cuts and vote for the Budget?

Corbyn continued his attack on the benefits freeze (“The benefits freeze takes £1.5bn from 10 million low and middle-income households. A low income couple with children will be £200 worse off.”) and pointed out that Labour would raise taxes on the top 5 per cent (reducing the 45p rate threshold to £80,000 and introducing a 50p rate on incomes over £123,000) but the damage was done.

Had the Labour leader simply avoided the subject of tax cuts – which has badly split his party – his attack on austerity would have been far more potent. But as it was, May managed to emerge largely unscathed despite her “broken promise”.

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Labour’s position on tax is politically sensible: few oppositions prosper by opposing tax cuts and the party has long pledged to target “the top 5 per cent” (those on £80,000-plus), rather than those on lower incomes. Yet the party’s divisions on tax have now become the biggest post-Budget split story. At a time when the Tories are riven over Brexit and much else, that is some achievement.

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