Labour corporation tax hike could help schools but dent economy, says IFS
Labour’s plan to fund higher school spending through increases in corporation tax could boost educational performance but would risk damaging the economy’s long-term growth prospects, the Institute for Fiscal Studies has said.
The thinktank’s analysis of one of Jeremy Corbyn’s flagship policies shows that reversing the government’s planned cuts to schools’ budgets would be comfortably paid for by the extra revenue raised by increasing the main rate of corporation tax to 26%.
Under current Conservative plans, spending per pupil in England will be cut by 6.5% between 2015-16 and 2019-20 – the first real-terms fall since the mid-1990s. The IFS said higher pension costs meant schools’ budgets were likely to face an 8% reduction in total.