Labour's money man Alan Johnson wants to tax and spend Britain out of economic mire
![Shadow chancellor: Alan Johnson wants to tax and spend](https://i.dailymail.co.uk/i/pix/2010/10/19/article-1321733-0BA98ABC000005DC-951_233x392.jpg)
Shadow chancellor: Alan Johnson wants to tax and spend
Shadow Chancellor Alan Johnson yesterday called for higher taxes and billions of pounds of extra public spending to pull Britain out of the economic mire.
The architect of Labour’s new economic strategy signalled a shift to the Left – saying ‘specific, targeted tax changes need to do more of the work’ of reducing the deficit.
But Mr Johnson appeared to be unclear about whether the Government’s cuts would cause a double-dip recession.
In his speech in the morning he accused the Coalition of taking ‘a huge risk with growth and jobs’ by imposing deep cuts to abolish the deficit within four years.
But in an interview later he appeared to contradict himself, predicting: ‘We may not go back into a double-dip recession – and I don’t think we will – and we may have levels of growth.’
It was Mr Johnson’s first speech since his surprise appointment, which came despite him having no background in economics. Concerns over his suitability were heightened when he mispronounced the key economic term ‘quantitative easing’.
He said Labour would reduce public spending cuts to an average of just 8 per cent, far less than the Government plans.
And he called for £10billion extra spending on infrastructure projects to maintain economic growth. In a significant shift, the Shadow Chancellor said Labour would use a formula of 60 per cent spending cuts and 40 per cent tax rises to tackle the deficit, rather than the Coalition’s 80/20.
For every pound raised in tax hikes, the Coalition will make £4 of spending cuts. Under Labour’s new formula every pound in extra taxes would see just £1.50 in cuts – implying much higher taxes in the long run.
Mr Johnson also proposed an unspecified £3.5billion extra levy on the banks.
The Tories last night said the speech showed that Labour was still ‘in denial’ over the scale of the deficit run up by the last government.
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