Is Labour planning pledge on scrapping university tuition fees?

Angela Rayner
Angela Rayner

Labour has given its clearest indication it will promise to scrap or significantly reform university tuition fees in its General Election manifesto.

Asked about the party's plans for tuition fees, shadow education secretary Angela Rayner said she "didn't want to give too much of the manifesto away" on a day when Labour was focusing on its plans to spend billions boosting schools and further education, funded by a tax hike for businesses.

Labour leader Jeremy Corbyn revealed he is carrying "some stuff in my pocket" on university tuition fees but said the plans would be revealed in the party's manifesto next week.

It came after Ms Rayner said voters should "watch this space" when asked if Labour will pledge to scrap fees in an interview on BBC Radio 4's Today programme.

The comments came as Labour announced plans to fund a major increase in education spending by hiking corporation tax.

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

The Tories accused Mr Corbyn of breaking a promise not to raise corporation tax for small businesses, although the Labour leader described the planned increase as "modest" and said firms would prosper off the back of his party's reforms.

Firms with profits below £300,000 would see their rate of corporation tax rise from 19% to 21% under Labour's plans.

Launching the policy at a college in Leeds, Mr Corbyn said he was offering businesses a "new settlement".

"A high-skilled and confident workforce is a must-have for a fairer Britain negotiating the post-Brexit world," he said.

"Our businesses both large and small will prosper on the back of education and skills and training finally being given serious attention by a very serious government.

"So it's only fair that businesses should be asked to contribute to the plan by financing the spending we are setting out today.

"And we will do this by reversing the tax cuts made by the Conservatives and still keep UK rates of corporation tax at the lowest of the (G7).

"It's what we term our 'new settlement'.

"When it comes to small business, the backbone of our economy, a Labour government will restore small profits rates and make only a modest increase."

Under Labour's education 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.

Paul Johnson, director of the independent Institute for Fiscal Studies, told Today Labour's corporation tax rise amounted to "one of the biggest tax increases in the last 30 years or so".

He added such a rise could discourage investment from business and risked raising smaller amounts in the longer term.

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%.

Tory chief secretary to the Treasury David Gauke said: "This is yet more chaos from shambolic Jeremy Corbyn, who can't even agree with himself about whether taxes on small businesses should rise.

"Last month he promised them he wouldn't put up corporation tax, now he's hitting them with huge bills.

"While Theresa May and her Conservative team have simplified and cut taxes for small firms, Jeremy Corbyn would drop a tax bombshell on every small business and working family in Britain to pay for his nonsensical policies."