Shadow chancellor says highest increases would be for top 1%, and only top 5% of earners would face rise

John McDonnell hinted that a Labour government would introduce tax rises on those paying the top rate of tax – at £150,000 and above – and that Labour’s biggest tax increases would be reserved for the richest.



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The shadow chancellor said those most affected by income tax increases would be “the 1% at the top”, a figure that roughly equates to the proportion already on the highest, 45% rate, of income tax.

McDonnell was careful to avoid being too specific but when questioned he declined to rule out raising the top rate of tax to 50p, saying the party was still “consolidating and confirming our manifesto”.

McDonnell had hinted earlier in the weekend that those earning over £80,000 would be asked to pay a “modest” increase. This would effectively create a new tax bracket for those earning between £80,000 and £150,000.

McDonnell said the party’s manifesto would clarify its new tax rates for those who earn over £80,000. “I think people will be pleasantly surprised on the modesty of what we are asking of people,” he said. “One of the principles is that the highest earners will pay the most.”



When Labour was in government it introduced a 50p rate of tax on those earning £150,000 after the financial crisis in 2010, but the rate was cut to 45p by George Osborne in 2013. Those earning between £45,000 and £150,000 pay a 40% rate.

Conservative sources responded by claiming that McDonnell backed an even higher tax rise, pointing to a 2012 blog in which he called for “the restoration of progressive income tax of 60% on incomes above £100,000”.

Those earning high salaries would benefit in other ways from Labour’s manifesto, he told the audience at the Museum of London. “I want to pay tribute to those who do pay their taxes at the high level,” he said. “They make their contribution and we thank them for that. At the same time, we want a fair taxation system. If we upgrade our economy, we will create a richer society.”

McDonnell also reflected on Friday’s local election results, in which the party lost more than 300 council seats, and mayoral elections in two of its traditional heartlands, Tees Valley and the West Midlands. On the BBC’s Andrew Marr show, McDonnell called the results “really disappointing” but refused to say whether he and Corbyn would step down if Labour loses the general election on 8 June.

“I’m not working on wild hypotheticals,” he said. “I think we’ve got a period of time in which we’ve not been able to get our policies across. Partly that’s the media, I have to say. I have to be straight about that. But also we are campaigning with a united party, our campaign has got to step up a notch. The general election starts now.”

On the ground, local Labour activists opposed to Corbyn have been discreetly compiling data from voters on whether a change of leadership could persuade them to back the party. Activists in a number of areas where the Labour vote slipped in the local elections, including parts of Yorkshire, the east Midlands and West Midlands, have been asking voters “what could we change that would persuade you to vote Labour?” according to canvass returns seen by the Guardian.

Canvassers mark papers with a ‘J’ if voters suggest changing the leadership. Those who suggest the Labour leader is the problem will get call-backs from the local Labour MP to try to bring in personal votes.

Alan Johnson, a Labour former home secretary who is stepping down as an MP at the election, said Corbyn had shown he could deliver his message to “rallies to hundreds of supporters in safe Labour territory,” but had to expand this reach in the election. “Here’s a chance for him to do that and he has to grasp [it],” Johnson told Sky News’s Sophy Ridge on Sunday.

Asked if this election was a battle for the existence of the party as a political force, Johnson said: “Yes, it is. You lose two elections and that’s bad enough. To lose three elections on the trot at such a difficult period for our country – that’s why Jeremy Corbyn has got to step to the plate, that’s why he’s got to do all the sorts of things that his supporters believe [in].”







