Labour will today signal a major tax raid on the middle classes as the party shifts even further to the Left.

John McDonnell, Shadow Chancellor and a follower of Karl Marx, will use his conference speech to call for a ‘new economics’ to redistribute wealth from the better off to those on benefits.

New leader Jeremy Corbyn gave the first hint of the new direction yesterday when he warned of inheritance tax hikes.

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Labour's John McDonnell, Shadow Chancellor (pictured above) and a follower of Karl Marx, will use his conference speech to call for a ‘new economics’ to redistribute wealth from the better off to those on benefits

And his deputy Tom Watson suggested a major spending spree, saying Labour was now ‘unashamedly anti-austerity’. In a chaotic opening day at the Brighton conference:

Unions and senior Labour figures wrecked Mr Corbyn’s attempt to set a policy of scrapping the Trident nuclear deterrent;

Mr Corbyn alarmed moderates by saying he would welcome communists, Trotskyites and Militant Tendency supporters into the party;

Mr McDonnell was found to have been urging militants to publicly confront Tory MPs and journalists who criticise Labour;

Mr Corbyn called for pupils to be taught about the right to strike and other aspects of the nation’s ‘incredible socialist tradition’;

George Osborne warned of a £218billion black hole in Labour’s spending plans – £12,000 for every working family;

Mr Corbyn faced further criticism over his sympathy for the IRA as he confirmed he supports a united Ireland.

The Labour leader’s humiliating setback over Britain’s nuclear deterrent came yesterday when he tried but failed to force a conference debate on the issue.

‘This was the first attempt to stamp his authority on the party and it blew up spectacularly in his face,’ said one shadow minister.

‘We are now in a position where the leader will have to vote against Labour policy.’ The party’s stance on Trident is now in disarray, with MPs likely to be given a free vote in the Commons next year to avoid the embarrassment of Mr Corbyn, a senior member of CND, voting against his party.

Leader Jeremy Corbyn gave the first hint of the new direction when he warned of inheritance tax hikes while Tom Watson (right) suggested a major spending spree, saying Labour was now ‘unashamedly anti-austerity’

As part of Mr Corbyn’s (left) ‘new politics’, Mr McDonnell will look at plans for a massive hike in national insurance contributions for the better off, higher taxes on business and a new ‘Robin Hood tax’ on the banks

Rows over policy are expected to dominate this week’s conference, with members of the shadow cabinet openly defying the new leader.

Senior MPs were yesterday issued with a briefing note advising them to explain away rows and divisions as being part of Mr Corbyn’s ‘new politics’.

All eyes will be on Mr McDonnell today as he sketches out the economic direction Labour will take.

The Shadow Chancellor will try to reassure moderates by paying lip service to the need to tackle the huge budget deficit left behind by the last Labour government.

But he will press ahead with controversial plans to print tens of billions of pounds of new money to fund a spending spree.

And he will announce a policy review to look at plans for a massive hike in national insurance contributions for the better off, higher taxes on business and a new ‘Robin Hood tax’ on the banks, which critics warn will damage the City.

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