Miliband’s plan: Return of the 10p tax rate

Labour's tax revelation: Ed Miliband announces his plan to reinstate the 10p lower tax band, as broadcast by the BBC.

Labour’s tax revelation: Ed Miliband announces his plan to reinstate the 10p lower tax band, as broadcast by the BBC.

What’s David Cameron going to whinge about now?

The comedy Prime Minister stuffed his foot deep into his own mouth during his questions on Wednesday, when he said he was not interested in Ed Miliband’s speech today because it would not contain any major policy messages.

Instead, Miliband not only took away one of Cameron’s favourite crutches – he has loved attacking Labour for removing the 10p tax rate (which he knew perfectly well was only intended to be temporary at the time) – but also spirited away one of Nick Clegg’s policy plans: Reintroduce the 10p rate and use a tax on mansions worth more than £2 million to pay for it.

That’s a brilliant strategy for the current situation. It answers Cameron’s criticism and it makes a clear message about Clegg – that Labour will do what he and his Liberal Democrats could not.

And it creates a clear priority divide between Labour and the Conservatives, who will introduce in a tax cut for people in the highest tax band in April.

Around 25 million people will benefit from this change, compared with 13,000 who will make money from the Tory tax plan.

His comment that the recovery will be created by the many – not just the few at the top – meshes very well with the opinion put forward on this blog yesterday about the Bank of England’s optimistic view of the future of the economy. The bank’s view, put forward by Sir Mervyn King, was that an improved manufacturing sector would lift us up – but this would only improve matters for people at the top of the economic ladder; Miliband’s plan brings rewards to those at the bottom.

And we know, don’t we, that people at the lower end of the pay scale keep the money circulating. That’s how the economy grows – keeping the money moving.

Mr Miliband also announced several other plans that would have important implications for working people and those who are on low incomes. These are to:

•Break the stranglehold of the big six energy suppliers.

•Stop the train company price rip-offs on the most popular routes.

•Introduce new rules to stop unfair bank charges.

•And cap interest on payday loans.

And a policy on tuition fees is promised before the next election; Miliband says he can see how off-putting they are to people who would otherwise put themselves through university.

These are all sensible measures. We pay too much for our energy; we pay too much on rail travel; the banks rip us off; and payday loans are nothing but a scam anyway – one that too many people are forced to use because the current system ensures they don’t earn enough to pay their way.

In the Q&A session, Miliband said he would tax bankers’ bonuses to fund a work programme for unemployed young people – and he thinks businesses would back this. It’s a plan that might work, as the economic benefit from getting people back into work – the expansion that would result – could offset the losses the banks would suffer. So everyone could win.

The urgent issue that hasn’t been covered today is that of disability benefits. Vox Political would like to see Labour change its approach to follow that outlined in the House of Lords this week: That the disability benefit system must be rethought, starting with the needs of disabled people, not with a plan for a budget cut.

As matters stood at the start of the current government, only 0.4 per cent of disability benefit claimants were believed to be claiming fraudulently. That’s one in every 250 claimants – a very small amount. The current bid to clear as many people off the books as possible – no matter how ill they may be – is an abomination that cannot be allowed to pass.

It seems David Cameron, campaigning in Eastleigh, has been asked for his opinion on the main announcement. He said it “looks like it has been cobbled together overnight”.

That’s a weak response from the man of whom Mr Miliband said: “Have you ever seen a more incompetent, hopeless, out of touch, u-turning, pledge-breaking, make it up as you go along, back of the envelope, miserable shower than this Prime Minister and this government?”

Expect Labour’s poll ratings to enjoy a significant bounce.

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7 Comments

  1. Bill Kruse February 14, 2013 at 12:31 pm - Reply

    Starting with James Purnell’s eponymous article in the Torygraph way back when, successive governments of both hues have spent huge time and effort portraying the disabled as malingerers and scroungers, the point being, I imagine, to facilitate the end of sickness benefits and the opening up of the mutli-billion pouind market to private insurers. I imagine every politician involved is on a very nice promise indeed. I reckon Miliband is afraid of going up against all this hostility. Some leader he is then. He hasn’t got the necessary in him and he never will have.

    • Mike Sivier February 14, 2013 at 12:42 pm - Reply

      No politician can do anything if they don’t have the votes to get them into office in the first place. If he thinks he’ll lose an election on the current policy, Miliband will change it. Then he will be obliged to follow through on his promises.
      (I feel constrained to add a point about manifesto promises: If a party – or Coalition, in the current case – fails to follow through on its promises, or in fact ignores them, as the current government has done, then it is my opinion that the electorate has an obligation to vote them out of office. No organisation should be allowed to deceive the public and get away with it).

  2. Martin Kroupa February 14, 2013 at 1:15 pm - Reply

    Quite right Mike. Any ideas how to make the government resign?

    Perhaps: http://epetitions.direct.gov.uk/petitions/45329 to start with.

  3. scarecrow78 February 14, 2013 at 1:17 pm - Reply

    But it seems Labour will continue with the present government’s “reforms” of the benefit system, with more of the same brutal sanctions and workfare being imposed upon the disabled and long-term unemployed.

    There will still be some people left behind, no matter who is in power.

  4. Paul Jordan February 14, 2013 at 3:23 pm - Reply

    10p rate would potentially be a good thing. As far as tuition fees go, Labour introduced them, so wait and see eh. ‘Break the stranglehold on the big 6’ = meaning what exactly? Unless that means public ownership it means nothing. ‘stop the train company rip-offs’ meaning what exactly? and only on the ‘popular routes’ which means that even if he has a meaningful solution to the first part of his comment, people using the unpopular routes will still be ripped off. new rules on unfair banking charges ? details please Ed. Capping interest on payday loans is a classic example of a liberal approach to a crisis, tweek here tweek there. sound bite here…Let’s focus on preventing people having the need to use them in the first place. I’ve just been campaining on the street in Edinburgh to scrap the bedroom tax, people are fuming and fearful, really fearful, the attacks on working people and the most vunerable are brutal and relentless. What’s going on is sick. Yeah, 10p tax would potentiially help, but only if the money isn’t taken away somewhere else. Obviously I’m NOT supporting the Condemn butchers but please don’t start getting all excited because Ed throws a bone and says a few soothing but meaningless sound bites. How many years where Labour in power? Privatisation of the NHS started under their watch, tuition fees, PFI’s, moves to try and privatise royal mail, no attempt to reverse Europes worst trade union laws, Illegal wars, etc etc. We’re going round in circles pinning hopes on Labour – they are a Neo-liberal capitalist party. If Labours poll does increase then the people of this country need to do some serious reflection if they think Labour will be there saviour. Even Alisdair Darling says if they where in power they would make cuts more savage than anything thatcher ever did, whilst they pamper the rich and spend money on illegal wars.
    HOW MANY YEARS WHERE LABOUR IN POWER? DEEDS PLEASE, NOT WORDS!

  5. Paul Jordan February 14, 2013 at 3:39 pm - Reply

    and British rail and I’ll keep thinking of more of Labours dirty neo-liberal deeds. All that’s going on requires a massive change in values and priorities… and some people are pinning there hopes on Ed Milliband – seriously?

  6. rainbowwarriorlizzie February 14, 2013 at 5:48 pm - Reply

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