Labour pledges £6bn annual boost to school budgets

Political reporter(wp):

A Labour government would raise corporate taxes to fund a £6bn-a-year boost to schools budgets by the end of the next parliament and create a National Education Service to equip Britain’s workers for the post-Brexit economy, the party will announce.

After Jeremy Corbyn launched Labour’s campaign with a rousing speech to activists in Manchester on Tuesday, promising to “transform Britain”, Labour hopes the tax-and-spend policy will draw a clear dividing line with the Conservatives, by underlining its determination to relieve the pressure on cash-starved public services.

While formal manifestos have not yet been launched, the education plans are the latest of a series of spending pledges made by Labour since the snap election was called – including raising the cap on NHS wages, and building up to a million new homes, many of them council houses.

Corbyn and his aides believe a clear anti-austerity message will engage disillusioned voters who feel left behind – the “just about managing families” Theresa May has also set her sights on winning over. But the Conservatives have repeatedly attacked Labour’s economic credibility, with Philip Hammond and David Davis last week claiming to have identified a £45bn “black hole” at the heart of the party’s spending plans.

By reversing repeated cuts to the corporation tax rate made by the Tories since 2010, Labour believes it could fund a series of ambitious pledges, including:

• Abolishing university tuition fees and restoring maintenance grants for the poorest students.
• Pouring an extra £5.6bn into the annual schools budget by 2021, to guarantee that five-, six- and seven-year olds will not be taught in classes of more than 30.
• Extending free adult education to allow workers to upgrade their skills.
• Restoring the educational maintenance allowance, paid to 16- to 18-year-olds in full-time study.

In total, Labour claims the package of education measures, including schools funding and increasing the adult skills budget would cost £6.7bn a year by the end of the parliament in 2020-21. They calculate this would still leave some revenue from the corporation tax rise to spend on other manifesto measures.

In another bid to differentiate themselves from the Tories, Labour would also guarantee that no school would lose out from controversial reforms to the national funding formula, which has led to some headteachers warning parents they will have to lay off teachers.

The government has been under sustained pressure over school finances, with funding per pupil projected to fall by 8% in real terms by 2020.

A report by the Commons public accounts committee (PAC) in March said schools in England are facing the most significant financial pressure since the mid-1990s, with school leaders having to find £3bn in savings over the next three years.

The scathing report accused the Department for Education of failing to understand the plight of England’s schools, which have already had to cut staff, maintenance costs, IT investment and pastoral services to meet rising costs.

Angela Rayner, the shadow education secretary, said: “We believe that lifelong learning and education is the real ticket to ensure that our workforce in a post-Brexit economy can reach its full potential.”

She added: “We are not interested in cutting corporation tax to levels that are unsustainable when our public services are at crisis point. It’s about investing in our young people.”

Rayner said the National Education Service title was a deliberate echo of the National Health Service, with its cradle-to-grave provision, free at the point of use. 

Shadow chancellor John McDonnell has repeatedly said that he will reverse the tax giveaways to companies, which have seen the corporation tax rate, which is levied on profits, fall from 28% in 2010, to 19% today, with more cuts scheduled to take effect in future years.

But Wednesday’s announcement is the first time Labour has revealed the full details of its plans, which would see the corporation tax rate increase gradually, to 26% by 2020-21. Small businesses would pay a lower rate.

That would still be the lowest level in the G7 group of advanced industrial countries; but the Conservatives are likely to seize on the planned tax rise as evidence Labour policies would frighten away foreign investors as the economy gears up for Brexit.

Separately, Labour would increase investment in schools by up to £20bn – funded through extra borrowing – to ensure that enough pupil places are available and buildings are brought up to scratch.

Labour hopes to get its campaign “grid” back on track with the education announcement, after Corbyn and his team came under pressure on Tuesday over Brexit.

The Labour leader said in his speech in Manchester that the issue of Brexit had been settled. Asked repeatedly afterwards by the BBC’s Laura Kuenssberg whether Britain would leave the European Union “come hell or high water”, Corbyn said: “People know that there’s been a referendum and a decision was made a year ago. We’ve set out very clearly our terms for negotiations.”

Senior Labour sources said Corbyn had not been trying to reopen the issue of whether Brexit should go ahead, but simply to emphasise that he disagrees with Theresa May’s insistence that “no deal is better than a bad deal”.

Labour’s parliamentary party was deeply split by Corbyn’s decision to impose a three-line whip on MPs, urging them to back the government bill triggering article 50, the formal process of leaving the EU.

With the election campaign underway, Labour is keen to move the debate on from Brexit, to the state of Britain’s public services, and its determination to bust the “cosy cartels” running Britain.

With just less than a month to go until the 8 June vote, the Labour leader unveiled the party’s battle bus on Tuesday, emblazoned with the election slogan “for the many not the few”.

“There is no doubt this country is being held back,” Corbyn said. “If your children are not getting the education they deserve because the class sizes are too high, then your children are being held back. If you’re a young couple, anyone trying to get a home, and can’t make a home because rent and house prices are too high, then you’re being held back.”

He presented a resolutely upbeat tone despite the Conservatives overwhelming poll lead, which stood at 22 points in the latest Guardian/ICM poll.

At the rally in Manchester, and a subsequent stump speech in Salford, Corbyn insisted Labour can still win the general election and urged activists to take the party’s message to the voters.

The Liberal Democrats have also launched their flagship education pledge, promising to invest an additional £7bn in schools and colleges.
Like Labour, the party said their extra cash would protect per pupil-funding in real terms and guard schools against any losses from the re-shaping of the national funding formula.

Lib Dem leader Tim Farron will launch the policy at a primary school in Cornwall on Wednesday, with the extra funds released by a pledge to reverse corporation tax cuts and the Conservatives proposals for funding new grammar schools. The marriage tax allowance, introduced as part of the Lib Dems coalition deal with the Conservatives, would also be scrapped, the party said.

Lib Dem education spokeswoman Sarah Olney said the money would reverse “crippling Conservative cuts” that left schools in perilous financial states. “While funding per pupil is set to see the biggest cuts in a generation, billions of pounds are being spent on divisive plans to expand grammars and free schools,” she said. “This extra £7bn of funding would ensure no school and no child loses out.”

Farron also announced on Tuesday that girls would be provided with free sanitary products in schools under a Liberal Democrat initiative that the party has said would end the hidden problem of “period poverty” – where teenagers miss school because they cannot afford pads or tampons.

David Gauke, chief secretary to the Treasury, 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. The Lib Dems are no better and won’t even tell people about the tax rises they would bring in.”