Ed Balls set out the direction a future Labour Government would take, if elected. Overall it seems his proposals would increase the budget deficit to around £100Billion. This would require funding and bets are the party would need to increase personal taxes significantly OR borrow the money from the World Bank adding the new loan to the £1.8trillion the country already owes. What a disaster!! A terrible legacy to be handed over to our children. Meantime bankers and their ilk are picking up salaries and bonus packages well in excess of £3Million each year. The very very rich need to give much much more back to society.
Labour Party Manifesto Plans for the 2015 General Election
1. Mistakes Made by the Last Labour Government.
a. Labour admitted the previous administration had got it wrong on immigration, tax, regulating the banks and tackling poverty. But insisted they had learned lessons of the past, and would not repeat them in the future. In an attempt to persuade voters to trust the Party with the nation’s finances,the Shadow Chancellor apologized for failing to regulate the banks in the last labour government. He said, “While it was the banks which caused the global recession, and it was the global recession which caused deficits to rise here in Britain and around the world, the truth is we should have regulated those banks in a tougher way”. “It was a mistake. We should apologize for it. And I do.”
b. On immigration, he said there should have been tougher rules on immigration from Eastern Europe. He added: ‘It was a mistake not to have transitional controls in 2004 and we must change the rules in the future.’ He went on: ‘We didn’t do enough to tackle the underlying causes of rising spending on housing benefit and in-work poverty. “So the next Labour government will raise the minimum wage, build more homes to get the housing benefit bill down and cap overall spending on social security”.
2. List of Things to be Introduced and Scrapped.
a. Child benefit increases to be capped at 1 per cent until 2016-17
b. Married couples tax break to be scrapped.
c. Retirement age to be increased further for Both Sexes.
d. Bedroom Tax to be scrapped.
e. NHS Bill to be repealed.
f. Benefits Cap to be retained at £26,000.
g. Winter Fuel Allowance to be means tested and removed from the richest 5 per cent of pensioners.h. Ministers’ pay cut by 5 per cent, and frozen until nation’s books are balanced.
i. Mansion tax on homes worth more than £2million to be introduced.
j. Minimum wage to be increased to £8-an-hour by 2020.
k. Compulsory jobs guarantee for young people and long-term unemployed to be introduced. (paid for by a new tax on Bankers)
l. Free childcare for working parents to be extended to 25 hours a week. (Funded by a new Bank Levy)
m. Business rates for 1.5 million business properties to be reduced. (funded by cancelling a planned cut in Corporation Tax)
n. Top rate of tax at 50p to be scrapped. (Reversing the coalition’s decision)
o. Firms paying workers the living wage hourly rate of pay to receive tax breaks.
3. Stating the Case for Financial Prudence
a. Labour vowed to restore the broken link between the wealth of the nation and family finances. “While our economy is growing again most working people are still not seeing any benefit from the recovery.” “This is our task: not to flinch from the tough decisions we must make and to show the country that there is a better way forward.” “Three years of lost growth at the start of this parliament means we will have to deal with a deficit of £75 billion – not the balanced budget George Osborne promised by 2015. And that will make the task of governing hugely difficult.” “Working people have had to balance their own books. And they are clear that the government needs to balance its books too.” No new spending commitments funded by extra borrowing
b. Ministers’ salaries were cut by 5 per cent when the coalition came to power and left at that level for the whole parliament, in the aftermath of the expenses scandal. Labour to reduce salaries by a further 5 per cent-reducing a cabinet minister’s salary by almost £7,000 to around £127,800.
c. Married couples allowance, worth £200 a year to couples where one partner does not pay income tax, due to be introduced next year, is to be scrapped saving £3 billion. money to be used introducing a lower 10p starting rate of income tax providing a tax cut for 24 million people on middle and low incomes.
4. Balancing the Books’ by 2020.
a. Analysis claims that Labour tax policies could cost the UK 300,000 jobs and more than £25billion in GDP. A, “Centre for Policy Studies” report analyses ten major tax announcements made by the Opposition, including an increase in corporation tax for most firms from 20 per cent to 21 per cent, a new top rate of income tax of 50p, a mansion tax on expensive homes, and a new financial transactions tax.
5. a. How Will the Deficit be Eliminated?
Questioned about how a future Labour government should tackle the the deficit Labour insisted their manifesto would contain no new spending commitments funded by extra borrowing. However, there is increasing pressure from many in the Labour Party to put up taxes instead of cutting spending.
42 per cent argued for more tax rises
18 per cent wanted spending cuts
7 per cent call for increased borrowing and
4 per cent said there is no need to reduce the deficit
6. A ComRes survey for BBC Sunday Politics found that;
85 per cent of Labour candidates thought the level of public spending was, “‘about right”‘
10 per cent said it was, “too low”
4 per cent said it was, “too high”
7. A survey of 73 Labour candidates by ComRes showed most want to see more tax rises to tackle the deficit, with only 18 per cent supporting cuts to public spending. But poverty groups warned the moves to prove Labour would be tough on the deficit would only make it harder for families to pay the bills.
8. Comments on the Proposals
a. Conservative Treasury Exchequer Secretary Priti Patel said, “The speech isn’t a serious plan for the economy – Labour would put the deficit up, not down.” “Savings on ministerial pay only cut a minuscule fraction of the deficit – less than 1 per cent of 1 per cent.” “For all the bluster, Labour still refuse to admit that they spent too much and they have opposed every decision we’ve taken to cut the deficit. “All a Labour government would offer is more inefficient spending, more taxes and more debt than our children could ever hope to repay.”
b. Simon Walker, Director General of the Institute of Directors, said Labour was, “on the wrong track if they think that raising taxes is the way to secure the economic recovery.” He added, “Bringing back the 50p rate of income tax will raise an insignificant amount for the taxman while sending a clear signal that Britain doesn’t want wealth-creators. Labour’s previous success came because they recognized the importance of enterprise in creating a prosperous society.” “To prove that they are pro-business, Labour must drop the commitment to this self-defeating, envy-driven tax.” “Recent cuts to corporation tax have benefited all businesses and made the UK a competitive place to invest. We would strongly urge Labour to think about the consequences for growth and jobs before hiking rates.”
c. The limit on increases to child benefit is expected to save £400 million over five years. However, it comes after Mr Balls has spent four years criticizing the coalition for cuts and changes to child benefit. Child benefit is paid at £20.50 a week for the first child and £13.55 for every other child, regardless of parental income. Since January 2013, families where one parent earns more than £50,000 have seen their child benefit cut, and those on more than £60,000 have lost it altogether.
d. Under austerity measures introduced by the Conservative-Liberal Democrat coalition Government, child benefit was frozen from 2010 to this year. Tory Chancellor George Osborne has already said it should only increase by 1 per cent in 2015-16. But Mr Balls said the restraint should continue for another year. With inflation running at around 2 per cent, it means the value of child benefit is falling in real terms.
Mr Balls said: ‘I want to see child benefit rising again in line with inflation in the next parliament. ‘But we will not spend money we cannot afford. So for the first two years of the next parliament we will cap the rise in child benefit at 1 per cent. ‘It will save £400 million in the next parliament. And all the savings will go towards reducing the deficit.’
e. The Children’s Society, chief executive Matthew Reed said, “Labour’s announcement on plans to cap child benefit rises comes after repeated squeezes on this bedrock of the family budget. “It represents a major real-terms cut to 13 million children. “Policy is about making choices and the shadow chancellor has made a choice, to look for savings by cutting help for children. “Child benefit has already been frozen from 2010, and then increased by just 1% this year, falling well below rising prices. “Now this proposal would compound that loss, seeing average families facing a £400 cut in child benefit per year by 2017. “We urge the shadow chancellor to reconsider so that children and their already struggling families do not suffer even more unnecessary hardship.”
f. Families charity Gingerbread. Chief Executive Fiona Weir said, “Child benefit helps to pay for essentials like food and clothes. For many parents, single parents especially, it can be a lifeline.” “Freezing child benefit will raise relatively little in terms of government savings, but means cutting vital support at a time when families are struggling to make ends meet and the number of children living in poverty is projected to rise rapidly over the next few years.” “This proposal would only make it harder for families to pay the bills.”