Jeremy Corbyn would fund pay rises for public sector workers partly through a 1% rise in corporation tax and bringing back the 50p top rate of tax, the party has said.

The office of the leader of the opposition said he wanted to end “unfair and politically motivated public sector pay cap” brought in by the former chancellor George Osborne, which restricts rises to 1% a year this parliament.

Instead, Labour would make a return to public sector pay agreed through collective bargaining and the evidence of independent pay review bodies.

Osborne’s 1% cap is predicted to save £5bn over the course of this parliament, but Corbyn’s office said pay rises could be afforded out of the money coming in from an increase in corporation tax and a return to the 50p top rate of tax. It said the policy would also lead to lower housing benefit and in-work benefit claims, lower spending on agency staff, higher income tax and national insurance receipts and a small stimulus to the economy.

It comes as Corbyn set out his pitch to older voters in an article for the Sunday Telegraph, calling on them to support Labour if they value public services.

In the article, which shows he is making an effort to reach out beyond his core support base, Corbyn said: “Even if you don’t think of Labour as your natural political home, if you value your NHS, care for the elderly, an education system for all and a public transport system that works for its passengers, then it may be time to think again.”

He said countless numbers had been let down in the last six years by the “devastation” of public services. And he launched a fresh attack on Southern Railway, saying the poor level of service in recent months proved that the rail industry should be renationalised.

It is understood some of Corbyn’s inner circle have been warning him that the party needs to do more to appeal to older voters, after becoming alarmed at polling that shows he is much more popular with the young.

In a recent ComRes poll, only 9% of those over 65 thought Corbyn would make a better prime minister than Theresa May; 77% thought May would be better. He fared better with voters aged 18 to 24, of whom 37% thought he would be better than May, compared with 43% believing she would do better.

Corbyn is trailing behind May’s Conservatives in the majority of opinion polls. However, he is the strong favourite to win the Labour leadership election in which he is being challenged by the former shadow cabinet minister Owen Smith.

He has raced ahead in securing nominations from local party branches this week, with almost 120 endorsements compared with 24 for Smith.

In an interview published by the Huffington Post on Sunday, Corbyn suggested it was not inevitable that he would resign as Labour leader, even if the party lost the next election,

John McDonnell, shadow chancellor and chair of Corbyn’s leadership campaign, previously said the Labour leader would go if he lost, adding: “Any Labour leader who loses an election usually goes.”



But asked by the Huffington Post UK whether he would quit in such a case, Corbyn said: “Look, nothing is inevitable. And let’s not start predicting the results of the next general election, which may be four years away. I’m campaigning for the leadership of the party at the moment, again.

“I’m very happy to be doing that. I’ve been travelling the whole of the UK, but we are also doing it in a slightly different way to last year. We are visiting a lot of places we didn’t go to last year because there wasn’t time. We are also using it to campaign more openly and more publicly on how we bring back in communities that have been left behind by the Tories. And the crowds are even bigger than last year.”

He has defended the fact that his party is behind the Conservatives in the majority of opinion polls, pointing to a number of byelection wins at council and parliamentary level.