My thoughts of return of 10p tax rate via mansion tax:
Whilst I concur the very policy of the 10p tax helped low paid workers one of Labour tax achievements then only see it scraped by them sent wave of criticism by Labour MPs, trade unions, and low paid workers.
Young Milband was right to say that Labour should not have done it. Let us remember that it happened on his watch with Ed Balls. Now that I have got it off my chest let us all embrace Labour one nation by Ed Miliband as one and stand behind our leader.
Ed Miliband’s call for the 10p rate of income tax to be brought back is noteworthy and welcome on two counts.
It disproves David Cameron’s jibe that there would be nothing new in Miliband’s speech and draws a line beneath Gordon Brown’s disastrous abolition of the 10p band in 2007.
Cameron has been allowed too many opportunities to mock Labour criticisms of his bankers’ agenda by pointing out that his chosen path was previously trodden by new Labour.
The gap between rich and poor in Britain today mirrors that of the Victorian era, which demands positive action to reverse this unjust trend.
Miliband’s proposal of a mansion tax on houses valued at over £2 million to pay for the lower starting rate of tax, which should benefit 25 million basic rate taxpayers, is an obvious steal from the Liberal Democrats, but so what?
It formed part of Nick Clegg’s bogus pre-election prospectus painting his party as the radical alternative to Labour, but it was never intended as anything more than a vote-catcher.
Cameron was desperate for Liberal Democrat support to form a coalition to oust Labour. He could have been forced to concede a mansion tax to get Clegg and company on board.
Such is the extent of personal wealth owned by Britain’s minted elite, which continues to appreciate at a prodigious rate, that a mansion tax should not be the only wealth tax considered by the Labour leadership.
To hear the Tory Party squealing that a £2 million house isn’t really a lot and that an average dwelling could have reached that level as the result of one or two home improvements simply underlines the reality of two nations living cheek by jowl in this country.
Miliband’s US-influenced terminology of “the squeezed middle” and his adoption of the old Tory slogan of “one-nationism” may grate on the ears, but if the examples he cites to justify his policies remain based on the rough justice dished out to working people, the grating may just be bearable.
Who was the last Labour leader to insist on “putting Labour where it should always have been – on the side of working people?”
Words are, of course, cheap, but statements laying down political priorities and displaying an economic understanding are important.
Miliband noted that the success of the industrial revolution was not the preserve of “the mill owners and the factory bosses” but was driven by “the people, who went down the mines, spun the cotton, built the ships and constructed the bridges.”
Workers are central to economic development and they are entitled to just rewards for their labour, not just wages but decent pensions, benefits and public services.
Miliband acknowledges this, but he and Labour policy review co-coordinator Jon Cruddas refuse to consider any alternative to the one-size-fits-all obsession with continued private ownership of the economy.
Cruddas fantasises about an undefined mystical alternative to the “managerialism of the state … (and) the transactions of the market.”
Miliband, for his part, would somehow “break the stranglehold of the big six energy suppliers” and “stop the train company price rip-offs,” but only public ownership can achieve this. Regulation has proven a paper tiger.
Labour is regaining some of its lost electoral ground but winning the next election outright will require a tidal wave of popular enthusiasm behind policies gripping the public imagination.
We have a Byelections and county elections wishing all our Labour candidates success in wining their seats as the road is long but achievable.
See article below:
A Labour government would seek to re-introduce the 10p starting rate of tax scrapped by Gordon Brown in 2008, Ed Miliband has announced in a speech.
Mr Miliband said it was a “very bad mistake” to get rid of it and the move would send a “clear signal” his party was on the “side of working people”.
The move, worth about £2 a week for people, would be funded by a “mansion tax” on £2m properties, he said.
But No 10 said it was a “stunning admission of economic incompetence”.
The decision to scrap the 10p tax band – announced in the 2007 Budget as part of a package which also saw the basic rate of tax reduced from 22p to 20p – was highly controversial.
Despite measures to compensate those affected, critics said up to 500,000 people were left worse off.
Mr Miliband said the move was “wrong” as the 10p tax rate made a difference to people on low incomes and increased incentives to work.
He said he was “determined to put it right” by reinstating the 10p rate after the next election and urged the government to consider doing it at next month’s Budget, describing it as the “progressive choice”.
“We would put right a mistake made by Gordon Brown and the last Labour government,” he said.
“We would use the money raised by a mansion tax to reintroduce a lower 10 pence starting rate of tax, with the size of the band depending on the amount raised. This would benefit 25 million basic rate taxpayers.”
Labour has previously indicated it would only set out tax and spending commitments in the run-up to the next election – scheduled in 2015 – and Mr Miliband made it clear that he would not commit to put any specific policies in its manifesto at this stage.
But Mr Miliband said the 10p pledge would send a clear message about Labour’s commitment “to a fairer tax system and improving the living standards of working people” as well as showing the party is “moving on from the past”.
Shadow chancellor Ed Balls said both he and Ed Miliband had raised objections to the 10p move when they were members of the cabinet at the time.
Asked on the Daily Politics whether it was a firm manifesto commitment, Mr Balls said they could not write their manifesto now, but the changes were something “we want to do… intend to do… plan to do” if the party gets into power after the next election.
The idea of a mansion tax was first proposed by the Lib Dems before the last election although the Conservatives oppose the move and the policy was not adopted by the coalition government.
Mr Balls said there were about 70,000 homes currently worth more than £2m – half of which were second homes – and a tax could raise an estimated £2bn.
He said the detail “had to be got right” but he would be willing to talk to the Lib Dems who he suggested were “still keen” on the idea.
In the speech, Mr Miliband also repeated his support for a temporary cut in VAT to boost economic growth – and called for action on train fares, “unfair” bank charges and capping interest on payday loans.
‘Never so good’
Criticising the government’s economic policy as a “race to the bottom in wages and skills”, he accused the Conservatives and Lib Dems of rewarding those at the top while “squeezing” everyone else.
Speaking in Bedford, where in 1957 Conservative Prime Minister Harold Macmillan famously said Britons had “never had it so good”, the Labour leader said that falling wages and rising prices mean many now feel “they will never have it so good again”.
“People in Britain are putting in the hours – doing the shifts – as never before. But something has changed in the last few years.
“There’s less chance of promotion, less chance of a pay rise, and at the same time, prices just go up and up and up: petrol for the car, tickets for the train, childcare for the kids, deposits for a first home.
“The ‘squeezed middle’ has never been so squeezed – and it looks like it will be that for years to come.”
He criticised the government’s decision to scrap the 50p tax rate for those earning over £150,000 from April 2013, saying “we can’t succeed as a country just by hoping wealth will trickle down from those at the top to everyone else”.
A Downing Street spokesman said Labour’s change of tack on the 10p rate was “a stunning admission of economic incompetence” and the coalition had helped low earners by substantially increasing the personal allowance – the level at which people start to pay tax – to £9,205 in April.
“The losers from Labour’s 10p tax fiasco have become winners under this government,” he said.
He also warned that a mansion tax “would mean government snoopers in every home to revalue your house for council tax, meaning council tax rises for anyone who’s improved their home in the past 20 years”.
Lib Dem Treasury Secretary Danny Alexander said Labour were “late to the party” on the need to reduce the tax burden on the lowest paid.
“After thirteen years in government, the only action Ed Balls took was to raise the amount of tax those on low incomes paid by abolishing the 10p rate. It was the biggest tax mistake they ever made and it has taken them until now to realise their error.”