(Bloomberg) — Britain's Labour opposition pledged to raise income tax for the richest 5% of the population while freezing sales and national insurance levies, as it sought to make up ground on Prime Minister Theresa May after heavy losses in local elections on Thursday.
John McDonnell, Labour's finance spokesman, will on Sunday set out his plans for the economy if his party wins the June 8 general election — an unlikely outcome given current opinion polls, and following local results that suggest May's Conservatives are heading for a landslide victory. The Tories in turn pledged to overhaul mental health legislation.
Labour promised not to increase income tax for those earning less than 80,000 pounds ($104,000) a year, the party said in an emailed statement. While it didn't give details of how much taxes would increase for those earning more, it pledged to use the money raised to improve public services.
(Related on ThinkAdvisor: Health Service Plans Poorly, Raising Costs, U.K. Lawmakers Say)
"The Labour Party is now the party of low taxes for middle and low earners, while the Tories are the party of tax handouts for the super-rich and big corporations," McDonnell will say in a speech, according to extracts released by his office. "Only the Labour Party is promising to stand up for working people, the majority in our country, while the Tories have made clear they are determined to carry on handing out tax giveaways to a wealthy few."
Thursday's results suggest May will significantly increase her majority in the House of Commons next month, a result she says would strengthen her hand in negotiations for Britain's divorce from the European Union. Labour has been criticized for failing to provide a viable opposition to the Conservatives, both over Brexit and economic policy.
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