September 11, 2015 / 12:43 AM / 4 years ago

Labour's Corbyn pledges UK windfall tax in 2020, targets RBS

Labour Party leadership candidate Jeremy Corbyn speaks during a rally in London, Britain September 10, 2015. REUTERS/Peter Nicholls

LONDON (Reuters) - The leading candidate to win control of Britain’s opposition Labour Party said he would introduce a punitive windfall tax, aimed at recouping money lost by privatising state assets too cheaply, if he becomes prime minister in 2020.

Taking specific aim at Royal Bank of Scotland, in which the government recently sold some of the large stake it owns, leftwing lawmaker Jeremy Corbyn pledged to revive a windfall tax on profits previously deployed by Labour when it won power in 1997.

Then, the incoming Labour government raised around 5 billion pounds by taxing utility firms that it said had been privatised too cheaply and were making excessive profits.

“We’re going to do the same again in 2020,” Corbyn said to loud cheers on Thursday at the final rally of a campaign which has promised to shift the centre-left party closer to its socialist roots.

Corbyn, who has already pledged to renationalise swathes of the economy, is the favourite to be announced leader of Britain’s second biggest political party on Saturday following their heavy election loss in May.

Last month Britain took a 1.1 billion pound loss on its shares in RBS when it cut the taxpayers’ holding to 72.9 percent from 78.3 percent, selling the shares below the price it paid for them at the height of the financial crisis.

Finance Minister George Osborne said at the time of the sale that the bank would benefit from being in private ownership, but Corbyn heavily criticised his handling of the deal and fired a warning to speculators.

“We’ve got news for Osborne and news for all those others: Those people that think they can mop up public assets on sale by this government at knock down prices need to think very carefully,” Corbyn said.

Reporting by William James; Editing by Tom Brown

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