John McDonnell warns Tory leadership contest will lead to 'race to the bottom' on tax and spending
3 min read
John McDonnell has torn in to the Tory leadership candidates for kick-starting a "race to the bottom" on tax and spending pledges.
The Shadow Chancellor accused former Brexit secretary Dominic Raab of "firing the starting gun" on a series of tax cut pledges by those vying to replace Theresa May as Prime Minister.
Last month, Mr Raab pledged to slash the basic rate of income tax by 5 pence over the course of a five-year Parliament as he pitched for support from Tory MPs.
The ex-Cabinet minister has also vowed to cut red-tape in Whitehall by merging some government departments together.
But in an interview with the Mirror, the Labour heavyweight blasted the Tory MPs for focussing their campaigns on issues which were "totally out of touch" with public concerns.
"It looks like quite a few of the others will be singing from the same hymn sheet, especially Boris Johnson," he said.
"Nine years of public cuts up until now have not produced what they have described as efficient savings."
Foreign Secretary Jeremy Hunt has pledged a cut to corporation tax to Irish levels of 12.5% as part of his bid to win over Tory members.
Meanwhile, Home Secretary Sajid Javid said it was "morally right" to reduce the tax burden on workers despite pledging a major investment to recruit 20,000 new police officers.
But Labour's finance chief said the pledges were a bid to appeal to "right-wing elements" within local Conservative associations.
He said: "We're facing the worst of all possible worlds, with Tory leadership candidates vying to cut income tax and at the same time having a cuts auction on our public services.
"Every Tory leadership candidate will want to pander to the right in the party associations themselves. The result in the European and local government elections will absolutely panic them into shifting even further to the right."
Mr McDonnell also lashed out at frontrunner Boris Johnson, accusing him of being "politically promiscuous" in a bid to win votes.
"He's been a traditional tax cutter no matter what the impact on public services", he told the paper.
"You would not associate consistency with Boris Johnson."
HAMMNOND WARNS AGAINST 'POPULISTS'
The comments came after Chancellor Philip Hammond urged his colleagues to avoid making "reckless" financial pledges which would be "very dangerous" for the country's economic recovery.
Speaking at the launch of a Resolution Foundation report on the impact of the higher minimum wage, he said: “The truth is, we have seen a gap open up – in Britain and in other developed countries – between the theory of how a market economy and free trade creates and distributes wealth, and the reality experienced by many ordinary people.
“But that doesn’t mean we should abandon our economic model. Of course, we can’t ignore people’s concerns either – otherwise the reckless solutions of the populists will flood in to fill the vacuum.
“So for those, like me, who believe passionately that harnessing the power of market economics is the only way to deliver progress … it is imperative that we take decisive action to show that the regulated market model can deliver higher wages and higher living standards.”
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