JOHN MCDONNELL is set to use his first speech as Labour’s shadow chancellor to push for a review of HM Revenue & Customs and a ‘Robin Hood’ tax on stock market transactions.
The coalition government fought hard against moves to introduce such a tax during the last parliament, including mounting a legal challenge to the so-called Tobin Tax.
The 0.01% levy proposed last term aimed at shares, bonds and derivatives across the whole EU, is intended to prevent speculative trading and prompt the financial sector to pay back some of what it received from governments during the financial crisis.
McDonnell is to consult with shadow business secretary Angela Eagle on the tax, but believes it could rein in the excesses of the City and help pay for improvements to the NHS and other public services.
He told BBC Radio 4’s Today programme: “Robin Hood tax at the moment is Labour Party policy on the basis of if we can introduce it globally, and that’s been Labour Party policy for some time now.
“However, what we are saying is today we are going to launch a review of our taxation system, we are going to bring the greatest economic minds in the world to bear on that issue, we are going to consult with the British people and then we will arrive at a decision on the way forward.”
McDonnell will also announce a review of HMRC to establish how the tax authority can be bolstered in its efforts to collect taxes, particularly the billions lost through avoidance, evasion, fraud and error every year.
He intends to examine its “operations, effectiveness and also look at its range of policies and the instruments that it has available to it to ensure that we maximise our tax take and at the same time it’s done on a fair and just basis”.
During his Labour leadership campaign, Jeremy Corbyn claimed the tax gap – the shortfall between tax due and tax collected – stands at £120bn, enough to wipe out the country’s deficit without cutting welfare or spending.
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