The Tories have handed big business a tax cut worth £110 billion while implementing austerity policies that left communities in “catastrophe”, Labour has claimed.
The opposition accused the Conservatives of creating a “bonanza for big business” after a new analysis of official figures - seen by HuffPost UK - revealed that cuts to corporation tax set out in the 2010 summer budget led to tax losses to the Treasury worth tens of billions of pounds.
Ahead of the eight year anniversary of the budget, Labour said the decision to reduce corporation tax to 24% over five years - and cut the small profits rate to 20% - cost the equivalent of £12 billion in tax receipts between 2010 and 2015.
Meanwhile, further tax cuts have since boosted the corporation tax giveaway to £47 billion, with the figure expected to hit £110 billion by 2022.
Shadow chancellor John McDonnell said: “The Tories, aided and abetted for years by the Liberal Democrats, have handed out billions of pounds in tax giveaways, while slashing funding for our vital public services.”
Calling the current Conservative government “a catastrophe for our communities”, he continued: “They have left our schools so starved of cash teachers are begging parents for money, taken police off the streets, and left our NHS and social care in crisis.
“The latest announcement for health falls short of what is needed and the Chancellor says there is no money for anything else, because he has handed it out in corporate tax giveaways.”
Theresa May announced on Sunday that the NHS would receive a £20 billion budget increase by 2022 - the equivalent of 3.4% a year.
The Chancellor is reported to be considering halting future planned corporate tax cuts in a bid to help fund the spending rise, while government has suggested that further cash will come from a so-called “Brexit dividend” and an increase in taxes.
However, critics have rubbished claims that the UK will save money by leaving the EU, with the head of the Institute for Fiscal Studies arguing that the government has already accepted that Brexit will swipe £15 billion a year from revenues.
McDonnell added: “The next Labour government will rebuild and transform Britain. We will invest in our economy and we’ll pay for it by taxing the super-rich and big businesses, to create a country for the many, not the few.”
A Labour source told HuffPost UK that the party is set to continue to highlight the “crisis” in public finances and services created by Hammond and his predecessor George Osborne through austerity policies.
But a spokesperson for the Treasury insisted that businesses are the “backbone of Britain”.
“Reducing their costs helps them to thrive; allowing them to reinvest in our economy, lower their prices, hire more staff, and increase wages,” they said.
“Not only are we supporting British business, we’re also helping families to earn more and keep more of what they earn by increasing the National Living Wage, increasing the tax-free Personal Allowance, and freezing fuel duty for the eighth successive year.”
Meanwhile, a Lib Dem spokesperson said the party had lowered corporation tax in coalition in order to “boost investment and revive our moribund economy” after the financial crisis under Labour.
“The result was a recovery in economic growth without a fall in corporation tax receipts, which despite Labour’s claims remain at their 2010 levels,” they said.
“This hard-fought recovery is being destroyed by the Conservatives, whose stubborn pursuit of Brexit – fully supported by Labour – has brought the economy back to its knees and already reduced tax revenues by billions of pounds a year.
“That is why the Liberal Democrats are campaigning for the most effective economic policy of all – an Exit from Brexit – as well the reversal of unnecessary further cuts to corporation tax by the Conservatives”.