Labour MPs to revolt against Corbyn’s controversial support for Tory tax cut benefiting top earners

Labour MPs are planning a major revolt against Jeremy Corbyn’s controversial support for a Conservative tax cut that will mainly benefit top earners.

The Labour leader has been warned that the move is “unacceptable” to many of his backbenchers ahead of a vote late on Thursday.

The leadership will order its MPs to abstain in the vote, but Lisa Nandy, a respected former shadow minister, said many of her colleagues viewed such a tax cut for the rich as “immoral”.

Yvette Cooper, David Lammy and Alison McGovern are among other Labour MPs who have criticised the move – a hike in the threshold before the 40p income tax rate kicks in at £50,000.

John McDonnell, the shadow chancellor, has said he will not oppose the change because Labour is “not going to take money out of people's pockets”.

He argues Labour will only ask the top 5 per cent of earners to pay more, under planned increases in income tax rates that would kick in at £80,000.

But Ms Nandy said: “It’s completely right for Labour to say the richest 5 per cent should pay more.

“However, I believe we have to roar loudly on behalf of 4.1 million children in poverty in this country – and vote against the Tory tax cuts that according to the Resolution Foundation overwhelmingly benefit the rich.”

The clash sets up the extraordinary prospect of Labour MPs rebelling against Mr Corbyn and Mr McDonnell for failing to be radical enough on tax and spend.

It follows Philip Hammond’s decision to bring forward the threshold changes, to next April, including an increase in the tax-free allowance to £12,500.

They will cost the Treasury almost £2.8bn which, the Foundation found, would overwhelmingly benefit wealthier households, with almost half the giveaway going to the top 10 per cent of earners.

Ms Nandy revealed the revolt to Sky News, saying there were “a number of people who feel that this is just too unacceptable”.

“In the end, we need to go back to our constituencies, sit in our surgeries and look people in the eye and explain why we’ve done what we did,” she said.

Earlier, Ms Cooper, a former Labour leadership contender, said: “This is wrong. I cannot support it.”

Ms McGovern, the chair of the Progress group, formerly associated with Tony Blair, said: “We can’t support spending more on tax cuts for quite wealthy people than on dealing with the universal credit mess.”

And Mr Lammy said: “These tax cuts leave a bitter taste in my mouth because they help high earners in the City far more than my constituents in Tottenham, some of whom this winter will be facing the choice between eating and heating.”

Mr McDonnell has refused to back down, saying. “We’re not going to take funding away from people.

“Some of these are middle earners, headteachers and people like that, who’ve had a rough time of it, as well as everyone else.”

The stance is being seen as evidence of the shadow chancellor’s increasing pragmatism, as he seeks to put Labour on course for an election victory.