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Labour to raise corporation tax to 26 percent if it wins election

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LONDON (Reuters) - Britain’s opposition Labour Party said on Wednesday it would raise corporation tax to 26 percent from 19 percent if it wins a June 8 election, seeking to win over sceptical voters with a promise to spend the proceeds on education.

Labour, led by Jeremy Corbyn, is trailing Prime Minister Theresa May’s Conservatives by between 15 and 24 points according to recent opinion polls, putting the party on course for a heavy defeat.

Corbyn, a veteran socialist campaigner who has based his campaign around taxing the wealthy to fund public service spending, said he would pay for increased school funding and free adult education by putting up the taxes on company profits.

“Our businesses both large and small will prosper on the back of education, skills and training finally being given serious attention,” he said.

“So, it’s only fair that businesses should be asked to contribute to the plan by financing the steps we are setting out today.”

Labour said they would increase corporation tax in increments to 26 percent by 2020/21, raising 20 billion pounds ($25.8 billion). Taxes levied on profits below 300,000 pounds would rise less sharply to 21 percent. The party has previously argued corporation taxes should be increased.

The Conservative Party, which plans to lower corporation tax to 17 percent by 2020, criticised the plan, calling it a “damaging tax rise” and accusing Corbyn of spending the money he plans to raise several times over on a range of different policies.

Reporting by William James; editing by Stephen Addison