‘Investment blitz’ to be funded by wealthy and includes tax on energy firms to tackle climate crisis

This article is more than 10 months old

This article is more than 10 months old

Jeremy Corbyn has launched the most radical Labour manifesto in decades, promising an “investment blitz” that would leave no corner of the UK untouched and welcoming the hostility of billionaires, big business and dodgy landlords.

Speaking at an upbeat event at Birmingham City University, where students and activists leaned over balconies adorned with banners setting out Labour’s policies, Corbyn urged the public to vote for “hope” at the general election in three weeks’ time.

At the centre of the manifesto, called It’s Time for Real Change, is a large increase in public investment, funded by taxes on corporations and top earners.

The Labour leader called it “a manifesto full of popular policies that the political establishment has blocked for a generation”, and it appeared significantly more radical than the party’s 2017 programme.

Corbyn insisted that, as Labour has promised in 2017, there would be no tax rises for 95% of earners, with only those on incomes of more than £80,000 being affected.

“You can have this plan for real change, because you don’t need money to buy it: you just need a vote,” he said.

A Labour government would also give public sector workers a 5% pay rise next year, helping to offset the impact of the 1% pay cap that has been in place for several years, the manifesto says.

One key revenue-raiser is an £11bn windfall tax on oil and gas companies which would create a “just transition fund” to help shift the UK towards a green economy without causing mass job losses.

The one-off tax would be calculated according to an assessment of each firm’s past contribution to the climate crisis, Labour said, and could be paid over a number of years.

The total is 10 times the £1.1bn the Treasury expects to raise from the oil and gas sector this year.

Corbyn said: “We can no longer deny the climate emergency. We can see it all around us, as the recent floods in Yorkshire and the east Midlands have shown. We have no time to waste. The crisis demands swift action, but it isn’t right to load the costs of the climate emergency on to the nurse, the builder or the energy worker.

“So a Labour government will ensure the big oil and gas corporations that profit from heating up our planet will shoulder and pay their fair share of the burden with a just transition tax.”

The windfall tax is one of the most striking policies in Labour’s manifesto, and follows a string of significant announcements during the general election campaign, including:

With Boris Johnson pressing home the Tories’ message that he will “get Brexit done”, Labour has been keen to shift the election debate to domestic policies – including its determination to tackle the climate crisis.

Corbyn has also repeatedly underlined his determination to take on big business, deliberately putting himself on the side of “the many”, against “the most powerful people in Britain”.

The proceeds of the new tax would go towards adapting the economy to tackle the climate crisis, including retraining workers from the oil and gas industries and investing in green technologies.

As expected, Labour’s migration policy is significantly less liberal than the open borders motion passed at its conference in Brighton.

The relevant passage says: “If we remain in the EU, freedom of movement will continue. If we leave, it will be subject to negotiations, but we recognise the social and economic benefits that free movement has brought both in terms of EU citizens here and UK citizens abroad – and we will seek to protect those rights.”

Labour is also publishing a separate “grey book” alongside its manifesto, to show how it will fund its promises.

It detailed tax increases worth £82bn a year. These would include a £9bn a year tax on financial transactions – the buying and selling of shares.

Higher earners would also face tax increases, with those paid more than £80,000 subject to a 45p rate, and a new “super-rich” rate of 50p for those earning more than £125,000.

Many of the new costs will fall on business, with income from dividends and capital gains being taxed at the same rate of income, for example.

Labour’s trade union supporters have insisted that its ambition of making progress towards net zero carbon emissions by 2030 must be backed by strong protection for workers – including the creation of 1 million jobs in green industries.

The windfall tax may prove controversial in Scotland, where Labour faces a tough battle against the Scottish National party, and where many voters have long felt they never benefited sufficiently from the country’s natural resources.

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The decision to focus the “just transition fund” partly on retraining oil and gas workers appears to be aimed at assuaging some of those concerns. Corbyn said: “North Sea oil and gas workers have powered this country for decades, often working under dangerous conditions. We won’t hang them out to dry.”

In 1997, the New Labour government imposed a windfall tax on utilities companies, which were perceived to have made excess profits in the years after privatisation. The proceeds were used to fund welfare-to-work policies.

Labour said £11bn was an estimate and the final figure would be based on an assessment of the cost of the retraining and investments in green technologies.

Output from the North Sea peaked in 1999, but the industry is likely to argue that the tax would accelerate its decline.