John McDonnell: ‘I will be the first socialist Labour Chancellor’

But Shadow Chancellor admits it is ‘inevitable’ Jeremy Corbyn will have to quit if he loses

John McDonnell has said he will be “the first socialist Labour Chancellor”, as he hinted at new “wealth taxes” to rescue public services.

The Shadow Chancellor confirmed that income tax will rise for people earning more than £80,000, but insisted it would be a “modest increase”.

And he told the BBC’s The Andrew Marr Show that further tax proposals on wealth are likely to follow, along the lines of plans to slap VAT on private schools.

On taxes on salaries above £80,000, Mr McDonnell said: “It will be a modest increase but it will be going to our educational services, our caring services and our NHS.”

Asked if he would be a “Marxist” Chancellor, he replied: “I will be the first socialist in the tradition of the Labour Party” – but without directly criticising his predecessors.

Mr McDonnell insisted Labour could win the election, but – surprisingly – admitted Jeremy Corbyn would have to quit if he lost.

“That will be inevitable wouldn’t it? Of course it would, every Labour leader who loses an election usually goes,” he said.

Mr McDonnell is attempting to outflank the Tories by unveiling what he is calling a “personal tax guarantee” of no increases for 95 per cent of taxpayers.

Labour has already said it would not raise VAT, but has now extended that promise to cover national insurance contributions and income tax for people earning below £80,000 a year.

Meanwhile, Theresa May is expected to ditch predecessor David Cameron’s 2015 pledge not to raise rates of income tax, national insurance or VAT until 2020.

The Shadow Chancellor declined to say whether he would introduce a higher rate of tax for those earning above £80,000, or lower the existing 45p rate for £150,000-plus incomes.

Pointing to next week’s manifesto, he said: “I don’t want to pre-empt any decisions that will be made within the democratic process of the Labour Party.”

Mr McDonnell was also asked about previously describing himself as a Marxist, including if there was anything to learn from reading Das Kapital.

“I believe there’s a lot to learn from reading Das Kapital, yes, of course, and that’s been recommended not just by me but many others, mainstream economists as well.

“I also believe in the long tradition of the Labour Party, which involves people like GDH Cole, Tawney and others.

“You put that all together and you have, I think, a direction for our economy based upon sound principles and fairness.”

But the Shadow Chancellor said “that’s where Marx got it wrong” when reminded that Das Kapital predicted capitalism as a system would crash and fail.

“I want to transform the system. That’s where Marx got it wrong, we know that,” he added.

The exchange opened up an easy attack line for the Tories, who described it as “a glimpse of the economic destruction” Labour would bring.

International Development Secretary Priti Patel said: “The man Jeremy Corbyn wants to make chancellor believes that the nonsensical ideas of Karl Marx – punitive taxes, closing down businesses and the removal of private property – should be at the heart of Britain’s economic policy.”