In a speech given in Salford last week, Labour leader Ed Milliband set out the policies a Labour government would enact were it to come to power following this year’s general election.
And, while the possibility of a hung parliament seems ever-more likely – in this guide, we’ll delve into the effects these initiatives could have were a Labour, or Labour-led government to triumph at the polls in May.
The idea of a tax on high-value properties – dubbed the ‘mansion tax’ – has been previously floated by Labour and the Liberal Democrats alike. In advance of the 2012 Budget, Secretary of State Vince Cable along with several other Lib Dem politicians, revealed that they had been pushing for its introduction.
However, this plan never came to fruition and the cause was instead taken up by the Labour Party. In 2013, Ed Miliband announced that, if elected, Labour would introduce such a levy and use the funds it generated to re-introduce a ten pence tax rate for Britain’s lowest earners.
It was later stated that clauses would be included to protect individuals who are ‘asset-rich’ but cash-poor, sometimes known as the ‘little old lady clause’.
Speaking in Salford, Miliband reiterated his commitment to the initiative, stating:
“Assuring decent, timely health care has a cost. And that’s why we have proposed a Mansion Tax for the very richest to protect and improve the NHS for our entire country. Something the Tories would never do. Because we believe that those with the broadest shoulders should bear the greatest burden.”
He pledged to fund improvements in the NHS with a levy on properties worth more than £2 million, as well as renewing his vow to restore the ten pence tax band for low earners.
Miliband’s Salford speech could spell good news for SMEs, should Labour see success at the polls this year. He pledged to support companies in green industries, as well as prioritising smaller firms.
“In an era of hard choices, it means putting cuts in business rates for small firms that will create most of the jobs of the future, ahead of further tax cuts for large corporations,” the Labour leader said.
The move is likely to be welcomed by SMEs and the organisations that represent them like the Federation of Small Businesses, which has long complained of the detrimental effect the levy has on its members.
While Miliband branded businesses – both large and small – as the ‘lifeblood’ of the economy, he warned that banks and energy companies had enjoyed getting their own way for far too long.
This suggests a Labour government would take a more active role in regulating these institutions, building on previous suggestions that especially large firms in these sectors could be broken up to promote competition.
In the wake of the Scottish referendum, the granting of devolved powers has hit the headlines of late. Promoted by many as a way to tackle the London-centric bias of previous governments, Labour has seized upon the popular policy in earnest.
“Making better decisions, making sure that every pound really counts. And giving power back to local people. Ending a century of centralization in our country,” said Miliband in Salford.
Devolution, depending on the form it takes, could revolutionise the way the UK economy operates – particularly if the ability to control certain taxes is put in the hands of local authorities.
Businesses and individuals wary of how a referendum on Europe could affect the UK economy could rest easy under a Labour government, with Miliband underlining his support for Britain’s continued involvement in the European Union (EU).
“Three million British jobs rest on commerce and trade within the European Union. Exiting the EU would damage British jobs, British families, British businesses,” he said.
“Make no mistake: exit from the EU would be a dramatic mistake for our country and our economy.”
Do Labour’s promises fill you with hope, or will they go the way of so many other pre-election pledges? We always want to hear what you have to say, so be sure to let us know what you think via Twitter.
And if you’re looking for advice on how forthcoming policy changes might affect your finances or those of your business, don’t hesitate to get in touch today.