Shadow Chancellor John McDonnell promised that under Labour only the “top 5 percent” of earners will be charged a higher rate of income tax. He told an audience in London last week: “The day-to-day funding increase will be funded by taxing, yes, the top 5 percent a higher rate of income tax. “Let me just make this clear, and cut through the lies and the fake news from the Tories over the last couple of weeks.

“As I’ve said before, income tax rates, national insurance and VAT will not increase for 95 percent of earners.

“It’s only the top 5 percent we will ask to pay a little bit more.”

Labour’s plans include an extended programme of wealth redistribution, with 12 tax changes to raise an additional £82billion a year – nearly double the figure in the 2017 manifesto.

According to the Institute of Fiscal Studies’ manifesto analysis, Mr McDonnell’s claim is “clearly not true”.

Speaking at an event organised by the IFS yesterday, senior researcher Stuart Adam listed all the policies which will be paid by low earners instead.

He said: “The simplest most straightforward example of that is that, just like the Liberal Democrats, they want to abolish the marriage allowance.

“That will essentially hit couples which are not higher rate taxpayers. So virtually none of this would come from the top 5 percent. It is all the bottom 95 percent and actually mostly the middle lower of the income distribution.”

However, in terms of economic importance, Mr Adam noted that the abolition of the marriage allowance is only a small part of Labour’s tax rises.

He said: “In quantitative terms, it is much more important to note, that while those receiving dividends and capital gains will certainly be better off than average, they are certainly not all in the top five percent of the population.

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“They will include small business owners, they will include people that might have a few shares safe from privatisation in the Eighties or demutualisation of building societies.”

Moreover, the senior researcher argued that at least part of the corporation tax rise will get passed on to workers in lower wages and customers in higher prices.

He explained: “I think we have good empirical evidence that.

“But even if you don’t believe that, even if this doesn’t happen, that will still mean that the company will make lower profits for shareholders

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“And again, that includes pretty much anyone with a private pension.

“That is not just the top five percent.

“Corporation tax has to be paid somehow by real human beings, and there is no reason to think that those people would be in the top 5 percent.”

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