The government thinks this figure is much lower, while the free market think-tank, the Institute for Economic Affairs, said this was not credible “unless one defines tax avoidance to include stacks of activities which the government now incentivises”.
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Mr McDonnell also denied Labour plans to introduce a financial transactions tax (FTT), known to its supporters as a “Robin Hood Tax”, even though he is on record as supporting such a measure in the past.
“And we will pay for it not on the backs of the poor and the most vulnerable but from a fairer taxation system which lifts the burden away from middle and low-income earners and from collecting the tax lost every year to corporate tax dodgers”.
Asked whether he could serve in a Labour government that was committed to scrapping Trident, he said: “We’d have to cross that bridge when we come to it”.
“John McDonnell is right to go back to first principles and review the shape of the United Kingdom economy”, said Mr Longworth. But crucially, he believes Labour can balance the books and rejects accusations he’s a “deficit denier”.
He added: “There will be cuts to tackle the deficit but our cuts will not be the number of police officers on our streets or nurses in our hospitals or teachers in our classrooms”.
In contrast the SNP has consistently opposed Tory austerity, voting against cuts and unfair welfare reforms, campaigning for a real terms increase in public spending, and opposing Osborne’s fiscal charter.
If Labour inherits a deficit in 2020, it will pay it down “at a speed that does not put into jeopardy sustainable economic growth”, he promised.
“I am very happy to take part in this Economic Advisory Committee and assist the Labour Party in constructing an economic policy that helps tackle some of the biggest issues facing people in the United Kingdom”, Piketty said in a statement. Former civil service head Lord Kerslake will lead the review of Treasury operations.
McDonnell also said he was in favour of the Bank of England’s independence, but that it may have to focus on more than just hitting inflation targets.
However, Corbyn’s victory in his party’s leadership election has thrown the Greens’ position as the more leftwing alternative to Labour into question, with them losing 1,000 members since August.
John McDonnell MP said the party is an “anti-austerity party”, as he spoke on tax, the City and the difference between him and Conservative counterpart George Osbourne.
He concluded: “This is the new politics…” “You invest in the economy and then it grows and people start paying their taxes”.
“Don’t mistake debate for division”.
Mr McDonnell predicted “heavy debates” and “dissent” as new policies are drawn up, but insisted that this would not mean the party was split, warning: “Don’t confuse democracy with disunity”.
The leader of the Labour party Jeremy Corbyn wrote an editorial on Europe in the Financial Times last week about how the FTT was central to the left-wing party’s push for Britain’s negotiation with Brussels over Britain’s European Union membership.
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“There is no magic pot of money that has up until now been ignored, so Labour’s plans to eliminate the deficit or renationalise major British industries are completely unfunded”.
