Ed M sets out 10p tax plan
A Labour government would bring in a new 10p tax band paid for by a mansion tax, Ed Miliband has announced.
In a major speech in Bedford, the Labour leader said that the policy would “put right a mistake made by Gordon Brown”. But Downing Street described the move as a "stunning admission of economic incompetence".
Mr Miliband used his speech to press home his message that the Coalition's squeeze on middle-income Britain had deepened the recession. He said that a Labour government would lay the foundations for a recovery “made by the many, not just a few at the top”.
Outlining the new tax policy, he said: “Let me tell you about one crucial choice we would make, which is different from this Government. We would tax houses worth over £2m. And we would use the money to cut taxes for working people.
“We would put right a mistake made by Gordon Brown and the last Labour government. 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.
“Moving Labour on from the past and putting Labour where it should always have been, on the side of working people.”
In the speech on “rebuilding Britain with a one nation economy”, the Labour leader also made it clear that he is keen to make the 2015 general election about declining living standards.
He said: “Britain is at a fork in the road. We can carry on as we are: falling wages, low growth, failure to tackle the deficit.
“Or Britain can take the path I have outlined: a recovery made by the many, tackling low growth and reducing the deficit, building not squeezing the middle, all of us playing our part in turning this economy around.”
Lib Dem Business Secretary Vince Cable, who has been a leading proponent for the mansion tax, welcomed Mr Miliband's "very sensible" announcement.
Labour's policy chief Jon Cruddas launched an inquiry by the IPPR this morning into the "condition of Britain", which will add to the party's manifesto.
Responding to the speech, a Number 10 political spokesman said: "This is a stunning admission of economic incompetence from Ed Miliband and Ed Balls – that their decision in Government to scrap the 10p tax rate hurt millions of working families. People will never trust Labour again.
"The low income working people who lost out the most from Labour’s 10p tax hike now pay no tax at all thanks to this Government’s record increases in the tax free personal allowance. Losers under Labour have become winners thanks to our tax changes.
"Now Labour’s new homes tax would mean government snoopers in every home to revalue your house for council tax, meaning council tax rises for millions. Instead this Government has increased tax on the richest in every Budget, through higher stamp duty on expensive properties and taxes on the biggest multi million pound pension pots."