Newspaper article The Evening Standard (London, England)

Labour Win Would Drive Jobs out of London, Warn Business Leaders; New Taxes on Property Owners, Firms and Well-Paid 'To Hit Capital Hardest'

Newspaper article The Evening Standard (London, England)

Labour Win Would Drive Jobs out of London, Warn Business Leaders; New Taxes on Property Owners, Firms and Well-Paid 'To Hit Capital Hardest'

Article excerpt

Byline: Joe Murphy and Nicholas Cecil

MAJOR employers would be driven out of London under Jeremy Corbyn's plans to target taxpayers and businesses, experts warned today.

New taxes on property owners, highearners, corporations and even the dead will hit London and the South-East disproportionately hard, economists and business leaders said.

As well as increasing the cost of living for Londoners themselves, tax experts said his proposals would deter over-seas companies, such as New York investment banks, from locating or remaining in the Square Mile, meaning fewer jobs and a loss of tax revenues.

The warnings come days after Labour's leader in Scotland, Kezia Dugdale, openly boasted that the party was planning to "tax wealth in London" in order to subsidise other regions of the country. Labour's headline tax dangers for London, according to experts, include tax hikes for higherearners, with a 45 per cent rate for people on PS80,000, rising to 50 per cent for those on PS123,000 or more. That would mean bigger bills for 1.3 million people -- including 316,000 Londoners -- but would also significantly push up the payroll costs for overseas firms who move staff to London.

A cut in the inheritance tax threshold, from a tax-free allowance of PS850,000 on a couple's estate to PS650,000, would also expose a million homes to "death duties", the experts say.

Stephen Herring, head of taxation at the Institute of Directors, said international companies were sensitive to corporation tax levels when deciding where to locate. But he also said that Labour's plans for raising tax on high incomes would put off firms such as investment banks.

"When companies move staff overseas, they have to compensate staff for the tax rates they will pay, which means these higher taxes fall on to the company's bills," he said. "This would be a significant extra cost for a bank considering locating in London." Julian Jessop, chief economist at the Institute for Economic Affairs, said: "The burden of any increases in taxes -- whether based on income or wealth -- will fall more heavily on people living in London and the South-East than the rest of the country. …

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