Closed Election: Labour manifesto shows party would raise taxes by £80bn a year — as it happened

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Jeremy Corbyn unveils party’s ‘most radical’ plans in decades, Tories backtrack on national insurance pledge while pressure on public finances increases


Welcome back

We are off again.

Yesterday the Liberal Democrats were in the spotlight as they launched their election manifesto in north London. Today it is the turn of the Labour party.

Jeremy Corbyn will look to kickstart the party’s campaign in earnest with sweeping pledges on housing, climate and nationalisation as he makes his pitch to voters.


In the papers

Labour might be looking to grab the headlines today, but the party will need to dislodge Prince Andrew, who again dominates the front pages. The election, meanwhile, is largely absent.

After a brief period of respite the Duke of York is back in focus after he announced he was withdrawing from public duties amid the fallout from his connection to the Jeffrey Epstein scandal. Almost every major British paper — tabloid and broadsheet alike — leads on that news.

At the Financial Times, we have run with the Trump impeachment inquiry, after the US ambassador to the EU, Gordon Sondland, testified that he was following the president’s orders when he put pressure Ukraine to announce a politically motivated investigation.


Labour in focus ahead of Birmingham manifesto launch

The big event of the day will be the Labour party’s manifesto launch, set to take place in Birmingham this morning.

Jeremy Corbyn will be looking to take hold of the campaign narrative as he sets out plans for £400bn of extra borrowing and an increase in taxes on big business and high earners to pay for a rise in public spending.

Housing will be a key centrepiece of the event, with Mr Corbyn vowing to spend £75bn on the biggest social housebuilding programme since the 1960s and setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.

Also likely to feature is a windfall tax on the oil industry as part of the party’s attempt to shift the UK towards a low-carbon, green economy — a move that will anger union officials worried about jobs in the North Sea.


Tory national insurance pledge will ‘not necessarily’ be met in next parliament

Boris Johnson’s plan to raise the national insurance payment threshold to £12,500 is an “ambition” that will “not necessarily” be reached by the end of the next parliament, according to Sajid Javid.

The Conservatives would, if re-elected, raise the threshold for workers to start paying national insurance contributions from the current earnings level of £8,632 to £9,500 next year, the chancellor said on Sky News.

“The ambition is to take then the threshold to £12,500, to try and keep raising it when we can afford it,” Mr Javid said. “This is the prudent and sensible way to do it.”

His comments come after Mr Johnson, the prime minister, let slip the policy pledge to raise the threshold in comments made while on the campaign trail in the north-east yesterday. Mr Javid’s comments appeared to play down the immediacy of any such rise, however.

We want to do it of course as soon as we can. But at each budget we will make that decision depending on the growth forecast provided and what other priorities we have.


FT poll tracker

As Labour’s front bench limber up for this morning’s manifesto launch, they will be hoping their ambitious campaign pledges will go some way towards closing the current polling gap.

At 29 per cent, Labour currently lags 13 points behind the Conservatives, according to the FT’s latest poll of polls, updated this morning. At 42 per cent, the Tories retain a solid lead over the opposition party, with the margin unchanged from yesterday.


Labour’s front bench head for Birmingham

Labour’s heavy hitters are Birmingham-bound this morning, with the manifesto launch expected around 11am.

Keir Starmer, the shadow Brexit secretary, said as he left Euston station that the policies unveiled today would offer people the “dignity and decency” they were demanding.

Meanwhile, Angela Raynor, the shadow education secretary has been braving the cold doing the media rounds, insisting Labour’s ambitious policy pledges are “absolutely deliverable” within the lifetime of the next parliament.

Shadow chancellor Diane Abbot has also headed for the midlands, promising more key policy revelations at the launch.


Markets round-up: European equities fall at the open

European stocks have continued this week’s miserable run this morning, with the composite Stoxx 600 down 0.7 per cent shortly after the open.

London’s benchmark FTSE 100 felt the pinch from a tumble in Royal Mail’s share price, with the bourse falling 0.8 per cent in early trading.

The UK postal operator was the biggest loser among major European stocks, shedding about 17 per cent this morning and setting itself up for its worst daily performance since October last year.

Sterling rose 0.1 per cent against the dollar to $1.2939.


Public sector borrowing at 5-year high in October

Valentina Romei reports:

Public sector net borrowing rose to the highest level in five years in October, adding to the pressures on the government’s finances as the main political parties pledge to increase public spending if they win next month’s election.

Public sector net borrowing, excluding public sector banks, increased to £11.2bn in October. This was higher than the £9.3bn expected by economists polled by Reuters and £2.3bn more than in the same month last year, according to data from the Office for National Statistics. This is the highest borrowing for October in five years.

In the fiscal year so far — April to October — borrowing rose to £46.3bn, £4.3bn more than in the same period last year, corresponding to a 10 per cent rise.

The extra borrowing adds pressure to the UK’s public finances at a time when the main political parties have pledged to increase public spending as they vie for support ahead of the December 12 poll.

Government spending is set to rise higher under proposals set out by both the Conservative and Labour parties.


Emoticon Alex Salmond indicted for attempted rape and sexual assault

Mure Dickie reports:

Alex Salmond, former first minister of Scotland and one of the most important figures in modern Scottish politics, has been formally indicted on 14 charges of attempted rape and sexual assault. 

The indictment prepared by prosecutors ahead of a preliminary hearing on Thursday in the case against case against Mr Salmond includes accusations of assault against 10 women at multiple locations around Scotland between 2008 and 2014. 

It contains the first official confirmation of details of the accusations against Mr Salmond, who stepped down as first minister and leader of the Scottish National party after the 2014 independence referendum and in 2017 lost his Westminster seat. 

A lawyer for Mr Salmond said on Thursday that the former first minister would plead not guilty. After an initial hearing on the case in January, Mr Salmond said he rejected “absolutely” the charges against him. “I am innocent of any criminality whatsoever,” he said. 

Full story here.


What to expect from Labour

The opposition party has slowly revealed some of its economic policies as the election campaign has gone on. All will be revealed at 11am, but here are some of the pledges we already know about:

• In the most high-profile policy announcement by any party so far, Labour has said it would nationalise BT’s Openreach network and provide free full-fibre broadband to every home and business in the UK

• We reported overnight that Labour has drawn up plans for a windfall tax on the oil industry as part of its attempt to shift the UK towards a low-carbon, green economy.

• On housing, Jeremy Corbyn will vow to spend £75bn on the biggest social housebuilding programme since the 1960s, setting a target of delivering 150,000 new government-supported homes a year by the end of the next parliament.

• The manifesto will also include plans to force companies to hand 10 per cent of their shares to workers over 10 years despite a business backlash.


Corbyn arrives for manifesto launch

The Labour leader and his key lieutenants have arrived at Birmingham City University for the manifesto launch, which is set to kick off in the next 15 minutes.

Watch this space for details on Labour’s pledges to the electorate as we get them.


Corbyn launches most leftwing Labour manifesto in decades

Labour leader Jeremy Corbyn has unveiled the party’s most left-wing election manifesto in decades including a windfall tax on oil and gas companies that could raise more than £11bn, reports Jim Pickard in Birmingham.

The oil levy will be used to pay for what Labour described as a “just transition fund”, providing an £11bn support package to help retrain 37,000 workers in the industry to “make the transition to a clean economy”.

Labour’s 2019 manifesto — launched in Birmingham this morning — promises some radical policies if the party is elected, including a number of nationalisations, higher taxes on big business, huge borrowing for capital investment and extra money for the National Health Service, social care and schools.


Oil and gas groups in Labour’s sights with £11bn windfall tax proposal

Jim Pickard reports from Birmingham:

Labour wants to raid UK-based oil and gas companies that have extracted oil and gas from the North Sea because it believes the UK has collected less tax per barrel than other countries such as Norway and the Netherlands.

“Had the UK charged the same effective tax rate as the average rate charged by North Sea countries from 1992 to the present day, it would have collected an additional £117bn in taxes,” a Labour official said.

The precise mechanics of the tax have not yet been worked out and would be the subject of a consultation.

“The big oil and gas corporations that profit from heating up our planet will shoulder the burden and pay their fair share,” Mr Corbyn was expected to say in his manifesto launch speech.

Labour estimated that UK continental shelf oil companies made a net operating surplus of £273bn between 1997 and 2018.

Labour claims the tax should have no effect on prices for consumers at the pump because oil prices are determined by the global oil market.

But trade unions have been fighting a rearguard action against the idea of the tax since it was discussed at Labour’s manifesto meeting last Saturday because they are concerned about its impact on the industry.


How will the oil tax play in Scotland?

The FT’s Sebastian Payne is wondering how Scottish Labour party leader Richard Leonard will be feeling about the oil and gas tax the UK party leadership has unveiled.

Labour used to be able to take scores of Scottish seats almost for granted, and has built its only majorities in history on a strong showing in Scotland’s 50+ constituencies.

But support for the party has collapsed north of the border, squeezed by both the Scottish nationalists and the Conservative party which has picked up unionist votes.


Labour launch event underway

Rebecca Long-Bailey, shadow business secretary, is on stage in Birmingham warming up for Jeremy Corbyn. She is seen as a potential successor to the Labour party leader when he steps down.


Emoticon Labour would increase taxes by £83bn a year

Jeremy Corbyn is on stage to a rapturous welcome.

He is holding a copy of the party’s manifesto, which is titled “It’s time for real change”.

Jim Pickard has some more details on what it contains:

A Labour government would increase taxes by £82.9bn a year with the vast majority falling on big business and the wealthy, according to the party’s manifesto.

The document sets out plans to raise £14bn a year from changes to capital gains tax, so that gains are taxed at the same level as income tax.

The party’s manifesto also includes – as well as a leap in corporation tax from 19p to 26p – a new way of taxing multinational corporations to raise £5.8bn a year. Under the new approach, corporate groups under common ownership will be treated as “unitary enterprise” so that profits are declared where economic activity occurs and where value is create.

The financial transactions tax would be extended in order to raise £8.8bn a year, while another £5bn would be raised by reversing recent cuts to inheritance tax, imposing VAT on private school fees, scrapping the Married Persons Allowance and introducing a second homes tax.

Mr Corbyn’s biggest surprise giveaway is the announcement of an extra £10.8bn a year for social care. The party promises that no one should ever have to pay “catastrophic” costs of more than £100,000 for the care they need in old age, with a lifetime cap on personal contributions to care cost.


Conservatives create spoof Labour manifesto site

FT Alphaville’s Jemima Kelly writes:

A spoof website with the address “labourmanifesto.co.uk” has been set up by the Conservatives just days after the party was criticised for changing its Twitter account name to appear to be an independent fact-checking service.

The site states on its homepage that it is “a website by the Conservative party” and says it is promoted by Alan Mabbutt, a senior member of the party. A link to the site was tweeted by the official Conservatives Twitter feed about 25 minutes before the official launch of Labour’s manifesto.

A statement on the website reads:

All you need to know about Labour’s 2019 manifesto is that Jeremy Corbyn as Prime Minister means higher taxes for you and your family, the chaos of two more referendums and more indecision and delay on Brexit.

The site was the top search result for “Labour manifesto” on Google just before Labour’s manifesto launch, but a few minutes later was not to be found on Google’s search results.

Earlier on Thursday Google said it would stop advertisers from being able to target election adverts using data like political affiliation and public voter records.


Aberdeen-based companies dismayed by Labour’s oil tax plans

Oil and gas companies based in Aberdeen reacted with dismay to the Labour party’s plans for a windfall tax, warning that any increase in taxes would drive away investors who are needed to maximise the volume of hydrocarbons that can still be recovered from UK North Sea, writes Nathalie Thomas in Edinburgh.

Otherwise Britain would be left relying on imports of oil and gas from countries such as Saudi Arabia.

“Any increase in tax rates will drive investors away and damage the long-term competitiveness of the UK’s offshore oil and gas industry, threatening jobs and future tax revenues and needlessly damaging the UK economy,” said Gareth Wynn from OGUK, a trade organisation for North Sea companies.

Our industry is already in action to play its part in helping the UK achieve its net zero emissions target and is doing so alongside minimising our reliance on imported oil and gas. Meeting as much as possible of UK demand from our own sources avoids offshoring emissions to other countries and helps us maintain the industrial expertise we need for engineering a future net zero energy system here in the UK.


Party’s Brexit pledge is to give ‘the people’ final say

Labour’s Brexit pledge is to “put this decision in the hands of the people to give you the final say”, with a legally binding referendum, Jim Pickard in Birmingham writes.

Meanwhile the document has watered down the vote at party conference in September for unlimited freedom of movement for all migrants.

Instead it refers only to granting EU nationals (who are already in the UK) to continue living and working in the country.

Rather than any concrete regime for EU citizens wanting to come to the UK after Brexit, the manifesto offers only warm words about the benefits of freedom of movement:

Our public services and our industry have benefited from workers coming here.


Corbyn promises to stand up to the establishment

Jeremy Corbyn has promised a Labour government would stand up to the most powerful people in Britain including “bankers, billionaires and the establishment” who have benefited from a “rigged” system.

“I accept that the opposition and hostility of the rich and powerful is inevitable,” he told supporters at Birmingham City University.

“The billionaires and the super-rich, the tax dodgers, the bad bosses and the big polluters – they own the Conservative Party. But they don’t own us. They don’t own the Labour Party. The people own the Labour Party.”

Mr Corbyn promised “real change for the many not the few,” and a manifesto “full of popular policies that the political establishment has blocked for a generation.”


FT analysis: Spoof site shows Tories doubling down on digital strategy

As we flagged below, the Conservative party’s digital team has struck again, with a crafty website to attack the opposition.

Sebastian Payne gives his take:

Visit labourmanifesto.co.uk and you will find a Conservative-branded site that criticizes Labour’s policy platform for its stances on Brexit, taxation and further referendums. Unlike the row over factcheckUK, this clearly states it is a Conservative website – although it is branded in Labour party colours.

The Tories have also been buying up search results to try and make labourmanifesto.co.uk the top result when you search “labour”. It is appearing on some Google returns, but not always as Labour’s digital team are trying to fight back.

Party insiders are not concerned about another row. “Lean in and double down, it’s the Vote Leave way,” said one Tory official, a reference to the Brexit campaign during the 2016 referendum.

Tory MPs are also tweeting out this graphic, which follows similar themes to the labourmanifesto.co.uk website:

For more on the subject of the Tories’ digital campaign, check out this piece by Seb


Corbyn: Labour offers ‘most radical’ plan in decades

Jeremy Corbyn has finished his speech with a promise that this election offers a once-in-a-generation opportunity to transform Britain using a manifesto which is “the most radical and ambitious plan to transform our country in decades.”

Painting his party as being on the side of ordinary people – from NHS patients to students and the elderly – Mr Corbyn said his policies would “rewrite the rules of the economy” for the better.

The opposition party leader closed his speech with a quote from Chilean writer Pablo Neruda:

“You can cut all the flowers but you cannot keep Spring from coming.”


Tax experts look at Labour’s sums on oil tax idea

Tax experts are privately questioning how much Labour’s proposed windfall tax would raise, pointing out that in previous years higher tax regimes have generally led to lower investment and production, writes Nathalie Thomas in Edinburgh.

While oil and gas producers in UK waters enjoy a favourable combined tax rate of 40 per cent, experts said this has not always been the case. Until the oil price crash that started in 2014, some older, bigger oil and gas fields in UK waters were paying a combined tax rate of more than 80 per cent.

The combined tax rate today in Norway – one of the countries cited by Labour – is 78 per cent but various incentives reduce this in reality to the low seventies per cent.

Tax experts, who declined to be named as they have to remain politically neutral, added that in Norway oil and gas explorers enjoy very favourable treatment when they are looking for hydrocarbons. They receive 78 per cent of their exploration costs back in cash from the state if they don’t find oil or gas. This regime doesn’t exist in the UK.

“Norway is considered lower risk, lower reward,” one oil tax specialist said, adding that Norway is a poor comparison as it still has bigger, more profitable fields compared to the ageing UK North Sea.

The tax regime improved for UK North Sea companies in 2016 when the former chancellor George Osborne reduced to zero a petroleum revenue tax which was paid on top of other charges such as corporation tax and had previously been as high as 50 per cent.


Corbyn: ‘Radical answers are what is necessary’

Jeremy Corbyn is now taking questions from journalists.

He defended the level of government spending outlined in the manifesto, and said that “radical answers are what is necessary” to fix the challenges facing the country.

On Brexit, the Labour leader was asked again whether he would back Leave or Remain in a second referendum, having failed to answer the question repeatedly during a televised debate earlier this week.

Mr Corbyn again did not directly answer, but instead said “my government would accept and carry out” the result of a second vote.

“Let’s get together on this, the British people have the final say, our government will carry it out, whatever the result of that vote is.”

The Labour leader also said he does not think his party’s policies would contravene EU state aid rules.

“So far as we are concerned this is all possible,” he said.


How will business react to Labour policies?

More from Jim Pickard who is in the room in Birmingham:

Jeremy Corbyn is insisting that his policies – free broadband, improved transport services, better infrastructure – will be welcomed by businesses which have been struggling to access capital and suffering from high business rates.

“We are absolutely on their side,” he said.

But companies will not be oblivious to the fact that the manifesto features a host of new taxes on the corporate world.

A Labour government would slash corporate tax reliefs, cut R&D funding, impose a new tax on multinationals, ramp up corporation tax and extend its financial transactions tax to raise even more money.

The Institute of Directors has said Labour’s approach on corporate governance is “frequently insightful but almost always one-sided.”

It’s absolutely right for Labour to seek improvement to how British businesses are run, and to look abroad for new policy ideas. But attempts to reform UK corporate governance must start from the recognition that our present system is an asset to the economy, and is admired and imitated throughout the world.


Labour proposals would see major shake up of energy sector

More from the FT’s energy correspondent Nathalie Thomas on what Labour’s plans mean for the industry:

Labour is going after oil and gas companies in a big way.

Not only would they be subject to a windfall tax but the manifesto states that a Labour government would also change criteria for companies that are listed on the London stock exchange so that “any company that fails to contribute to tackling the climate and environmental emergency is delisted”.

It’s similarly bad news for energy infrastructure companies such as National Grid, as well as the biggest electricity and gas suppliers. Labour has stuck to previous pledges that it would re-nationalise energy networks — the pipes and wires that transport electricity and gas to homes and businesses.

It would also take back into public hands the supply arms of the “Big Six” energy companies, including British Gas.

There is a boost for the nuclear industry, however: Labour said it would build “new nuclear power needed for energy security”.


More on the proposed tax rises

The FT’s chief political correspondent Jim Pickard writes:

The most striking thing about the Labour manifesto – and the accompanying “grey book” with costings – is that it features £82.9bn of tax rises and the equivalent extra annual spending, aside from an extra £400bn of capital borrowing.

That tax increases is markedly higher than the £48.6bn of extra annual tax and spending in the 2017 Corbyn manifesto.

The biggest revenue-raiser in the entire 105-page document is dealt with in only 18 words:

“We will end the unfairness that sees income from wealth taxed at lower rates than income from work.”

But it will raise an expected £14bn a year, according to Labour’s costing document. The balance sheet estimates revenue raising of £9bn a year from taxing capital gains at income tax rates and another £9bn from taxing dividends at income tax rates – but then substracts £4bn as a “reduction for uncertainty”.


Labour’s manifesto in brief:

Here’s a reminder of the plan for government set out by the Labour party today:

The manifesto — launched in Birmingham on Thursday morning — promises a host of radical policies if the party is elected including:

• A wave of nationalisations

• Higher taxes on big business

• Huge borrowing for capital investment

• Extra money for the National Health Service, social care and schools

• A new windfall tax on oil and gas companies


Business reacts: ‘Command and control isn’t the way’

Labour has shown its hand and corporate Britain has been quick to deliver its verdict. It is not overly positive.

The British Chambers of Commerce has hit back at what it sees as “excessive intervention” and “sweeping tax rises”.

While the lobby group welcomed pledges to reform skills funding and upgrade infrastructure, it said that in order to deliver its aims a Labour government would have to work in “true partnership” with business.

This is the response from Adam Marshall, BCC director general:

Command and control isn’t the way. Excessive intervention in business governance and sweeping tax rises would suppress innovation and smother growth.


What impact would higher taxes have?

Rupert Harrison, a portfolio manager at BlackRock and previously chief of staff for former chancellor George Osborne, has questioned the effect of Labour’s proposed higher taxes:


Tories promise to walk away from US deal to protect NHS

A Conservative government would walk away from a US trade deal if it meant allowing big pharma companies to charge the NHS higher prices for their drugs, a senior minister has said.

Liz Truss, secretary for international trade, said drug prices would not be on the table in any post-Brexit trade negotiations with the US.

A trade deal with the US is one of the highest priorities for some Brexiters, but Labour has turned fears over the NHS’s vulnerabilities in any negotiations into a key pillar of its general election campaign.

“It is just simply not on the table, we are not interested… we will walk away,” Ms Truss told the BBC.


Small businesses group wants more details on Labour party plans

The Federation of Small Businesses has given a broadly positive appraisal of Labour’s plans, but wants more detail in some areas, writes Andy Bounds.

“We look forward to the launch of Labour’s small-business manifesto in the days ahead, as promised by the shadow chancellor on Tuesday,” said Mike Cherry, the national chairman of the FSB.

The cast-iron commitments to end the late payment crisis and ban late payers from public procurement processes are critical, but light on detail.

We’re clear about the other interventions that are needed in this space: making corporate boards fully accountable for poor supply chain treatment and properly empowering a new Small Business Commissioner.

There are good proposals here to help our 4.9m-strong self-employed community. Specific commitments to reform the Universal Credit system so that it works for the self-employed, improve access to mortgages and pensions, as well as end late payments will all be cheered.

“While Labour has pledged to support the many small firms that will inevitably struggle with its proposed rapid increase to the National Living Wage, it’s stopped short of saying exactly what that support would look like,” Mr Cherry said.

It should start by increasing the £3,000 discount on national insurance bills that small employers receive through the Employment Allowance.


FT analysis: Corbyn’s promised transformation

The FT’s UK political commentator Robert Shrimsley said the sheer scale of the proposed changes offers a chance to harness anger in favour of higher tax:

Arguably the most dramatic change would be that proposed under the heading of a Green New Deal. The goal of reaching net zero carbon emissions by 2030 has been slightly diluted: it is now an “aim”. Even so, the re-engineering of the economy would be a huge shock.

Jeremy Corbyn sees the green agenda as a vehicle for wider reform and provides an appeal to younger voters — for whom the climate crisis feels far more pressing even than Brexit. The party sees this as a potential game changer. If Mr Corbyn, currently trailing in the polls, manages to claw his party back into contention it will be because of this environmental strategy.

Read Robert’s full analysis here.


Markets: FTSE 100 on track for biggest two-day fall in eight weeks

European stocks were subdued on Thursday, with the composite Stoxx 600 posting its fourth consecutive daily decline.

London’s benchmark FTSE 100 is heading for its biggest two-day fall since early October, with a 1.5 per cent drop over the two sessions. The index was recently 0.7 per cent lower on the day. Royal Mail, down about 14 per cent in early afternoon trade, has topped the list of moves today in Europe.

The postal operator, which warned this morning that its UK business could swing to a loss next year, said it is expecting a lift from the election and postal votes. The company this month won a High Court injunction to block a postal strike over Christmas, which would also have impinged on the general election.

Sterling rose 0.2 per cent against the dollar at $1.2951, while against the euro it was trading at 85.51p. £1 recently bought €1.1686.


Tories raise millions more than any other party

Laura Hughes reports:

Boris Johnson’s Conservative party raised £5.7m in the first week of the general election campaign, according to the latest figures.

In the same period, Labour raised just £218,500.

Figures published on Thursday by the Electoral Commission showed the theatre producer John Gore donated £1m to the Tories.

The Liberal Democrats raised £275,000 and the Brexit party received one major donation of £250,000 from the businessman Jeremy Hosking.


The Labour manifesto in numbers

Away from the major policy initiatives, here are some of the other pledges revealed today in the Labour manifesto:

16 years old: The new voting age, bringing 16 and 17-year olds into the franchise for the first time.

32 hours: The new length of the average working week, within a decade. Labour said there would be no drop in pay thanks to increased productivity.

22,000 football pitches: The amount of space that would be covered by all the new solar panels to be built by 2030.

£1 billion: Cultural Capital Fund to transform libraries, museums and galleries across the country.

0: Members of the House of Lords. Labour said it would “work to abolish” the unelected upper chamber.


Tories take out ads on left-leaning site

The Conservative party’s digital team has taken out more crafty advertising, Sebastian Payne notes.

They have taken out adverts on LabourList, a prominent left-leaning blog, to criticise the party’s manifesto.

Update: Sienna Rodgers, the editor of LabourList has said the Conservatives bid for advertising space via Google “and tried to hijack our site.”

The ads have now been blocked, she added.


Concern in the North East over Labour’s oil and gas tax

The FT’s north-east of England correspondent Chris Tighe reports:

In north-east England – traditionally a Labour heartland – the oil and gas, subsea and renewables sector is an important economic bright spot.

The region’s sector, which has some highly competitive international players, has a strong track record of innovation. It also offers relatively well-paid work for manual workers as well as for white collar and technology specialists.

Labour’s oil and gas tax met an uneasy response. People in the sector were keen to point out there is already a strong flow of finance and technology from oil and gas into renewables – a shift which they argue a windfall tax could stymie.

George Rafferty, chief executive of NOF, a north-east headquartered, national energy sector business development body, said:

“We have to increase green energy production, but this policy will stifle innovation in the sector and only serve to slow the introduction of new low carbon solutions.”

Tony Trapp, founder and executive chairman of Northumberland-based Osbit, an offshore equipment supplier, also expressed his unease.

“The idea of imposing a levy on past activity in the oil and gas market seems unwise. Surely a tax cannot be levied on legal activities in the past? What are we supposed to do? Wind up the business and start again?”

Osbit, which employs more than 100 people, and many more through its north-east supply chain, historically had 60 per cent of its turnover in oil and gas. But that knowledge is now being applied to new markets, including offshore wind and deep-water nodule harvesting for minerals used in electric car batteries.

“If you tax the offshore industry all you are going to do is slow it down,” he said. “What we’re doing now in offshore wind and nodule harvesting is heavily based on all the information and expertise gathered while developing oil and gas.”


IFS: Labour proposing ‘vast’ tax and spending programme

The Institute for Fiscal Studies has questioned Labour’s ability to deliver the “vast” tax and spending pledges outlined in its manifesto today.

“Take it from me, these are vast numbers, enormous, colossal, in the context of anything we have seen ever,” Paul Johnson, director of the IFS told ITV.

The respected think tank said in its analysis of the manifesto that it is unlikely Labour could raise the sums they have suggested from their taxation policies.

“If you want to transform the scale and scope of the state then you need to be clear that the tax increases required to do that will need to be widely shared rather than pretending that everything can be paid for by companies and the rich,” Mr Johnson said.

The think tank added that it would be “extremely hard” to deliver the scale of capital spending that Labour has proposed, “certainly in an efficient and cost effective way.”


Prime minister: Labour’s policies have no ‘economic credibility’

Boris Johnson has given his reaction to Labour’s manifesto.

Speaking on a visit to Bedford, he said “none of this has any economic credibility”.

But the prime minister was quick to pivot back to Jeremy Corbyn’s stance on Brexit in his comments to the BBC:

What is his plan to deliver Brexit, and what is the deal he wants to do?


Labour’s Brexit plans will keep UK closely aligned with EU

George Parker and James Blitz report:

Labour party leader Jeremy Corbyn promised to “get Brexit sorted” within six months of winning the general election today, deliberately apeing Boris Johnson’s pledge to “get Brexit done”.

But although the slogans are similar, the policies are very different.

The Labour manifesto sets out the “sensible” Brexit deal Mr Corbyn would seek to negotiate with the EU: it would represent a far closer economic and political partnership than that proposed by Mr Johnson and would be broadly acceptable to the EU27.

Crucially, it would see Britain remain part of the EU customs union — with the country benefiting from, but having no legal say over, trade deals negotiated by Brussels with countries around the world.

There would be “close alignment” with single market rules to avoid regulatory checks at the border, with Britain staying within EU agencies. Britain would remain aligned with the EU on workers’ rights, the environment and consumer protection.

Read the full piece here.


Is Corbyn’s radical Labour manifesto eye-catching or eye-watering?

FT deputy opinion editor Miranda Green says credibility among ordinary voters is key when it comes to Labour’s most leftwing manifesto in a generation.

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Labour’s ‘vast’ plans

A reminder of today’s main election news.

Labour leader Jeremy Corbyn has unveiled a radical manifesto, promising a wave of nationalisations, huge borrowing for capital investment and higher taxes on business and the rich.

Mr Corbyn said “radical answers” are needed to fix the challenges facing the country and re-engineer the economy. “I accept that the opposition and hostility of the rich and powerful is inevitable,” he told supporters at Birmingham City University.

The Institute for Fiscal Studies, a respected economic think tank, expressed scepticism over the party’s tax and spend plans, which it said were “colossal in the context of anything we have seen, ever.”


Key reads for this evening

Jim Pickard and Daniel Thomas write that Jeremy Corbyn’s manifesto has sparked fears across corporate Britain of a return to 1970s state intervention.

Trade Secrets is the FT’s must-read daily briefing on the changing face of international trade and globalisation. Today’s focuses on the general election, where Alan Beattie writes that both parties will have fewer realistic choices than they claim.

• And in other news, prime minister Benjamin Netanyahu has been charged with corruption by Israeli prosecutors in a long-awaited decision that threatens to end the four-time premier’s political career.


That’s all for this evening

We are going to wind the live coverage down for this evening. Thanks for reading and please do join us again tomorrow morning.