Labour to hike corporation tax to boost education spending

General Election 2017

Labour will fund a major increase in education spending by hiking corporation tax under plans being set out by Jeremy Corbyn.

The plans for a National Education Service would see class sizes for five-to-seven year-olds kept below 30, while almost £5 billion extra would be pumped into the English school system by 2022.

Labour leader Mr Corbyn vowed to "transform our schools and education system to ensure a future for the many not the few" by reversing funding cuts since 2010.

The plans will be funded from the £20 billion Labour says will be raised by raising corporation tax from its 19% rate to 26% by 2021/22 if Mr Corbyn becomes prime minister.

Under Labour's plans:

:: There would be a real terms increase in funding, estimated to cost £5.66 billion a year by the end of the parliament, with £4.8 billion going to English schools

:: All primary school children would get free school meals

:: The education maintenance allowance for college students, which was worth £30 a week in England when it was scrapped in 2010, would be restored

:: Maintenance grants for university students would be restored

:: Fees on courses for adult learners looking to retrain or improve skills would be scrapped

Mr Corbyn said: "People of all ages are being held back by a lack of funding for education, and this in turn is holding back the economy by depriving industry of the untapped talent of thousands of people.

"The Conservatives have spent seven years starving schools of funding, meaning headteachers are having to send begging letters to parents to ask for money. They have also cut support for students and forced colleges to increase fees. It's created a downward spiral that is bad for the people being held back and bad for the economy.

"Labour will do things differently. Our new National Education Service will transform our schools and education system to ensure a future for the many not the few. We will reverse the Conservatives' tax giveaways to big business and put money back where it belongs, in our schools, our colleges and our communities."

As well as the commitment to a real-terms increase in funding, to ensure that no school in England loses out under the proposed new national funding formula, Labour will spend around £335 million a year.

Labour said that projections under Tory plans would see £44.3 billion of spending on schools in 2022, under Mr Corbyn's plans the figure would be £49.1 billion.

Some £8 billion of capital investment will ensure that schools have the places they need to meet demand, while £13 billion will ensure buildings are up to scratch.

Labour has already committed to fund the free school meal plan by imposing VAT on private schools.

The increase in corporation tax to 26% by 2020-21 will still leave it at the lowest rate in the G7, Labour said - although US president Donald Trump has vowed to slash the rate in his country to 15%.

Plans set out by Chancellor Philip Hammond for the UK would see the rate fall to 17% in 2020 - when under Labour's plans it will be 24%.

Labour figures suggest that by 2021-22 an extra £19.4 billion would be raised through the measure.

Treasury Chief Secretary David Gauke said: "Jeremy Corbyn can't deliver any of this - they're just made up promises on the back of nonsensical spending plans. He's spent this damaging tax rise on businesses on 12 different things and he's already dropped numerous things he's said he'd do before."