Labour sheds its 'tax and spend' policy

A NEW training levy on business, to be paid directly to employees, and use of the planning system to direct industrial investment, are being considered by the Labour Party in an important shift in economic policy to be announced next month.

As part of the most decisive change yet from the party's traditional 'tax and spend' approach, Gordon Brown, the Shadow Chancellor, is expected to propose that existing tax and regional incentives to industry be used to reward employers committed to training a highly skilled workforce.

The move follows a recent meeting with the Tribune group of MPsat which Mr Brown floated the idea of doubling or trebling the training levy on business proposed in the party's 1992 election manifesto. The proposal was for 0.5 per cent of payroll costs to be levied from companies not providing satisfactory training.

In a departure from the historic trend of Labour policy, the money would be transferred directly to individual employees, to 'buy' their own training, rather than going to training quangos.

Mr Brown will hint at the methods by which a Labour government could mount a policy of industrial intervention without using public money. One notion is for the system of 'planning gain' - under which local authorities grant planning permission to developers if they also provide communal services such as roads or recreation facilities - to be extended to regional level.

One possibility is for permission for development to be granted in one region if the company agreed to build new plant in more deprived parts of the country.

Mr Brown will appeal to consumers in a series of policy speeches next month, laying emphasis on 'trust-busting' of monopolies and cartels, regulation of the banks and financial interests. He will also advocate 'green taxes' as an alternative to levying income tax from the middle and lower income groups. He has already dropped Labour's pre-election proposals for tax on lower income groups.

Other plans include proposals for G7 to discuss global exchange rate stability and for international controls on currency speculation. This week Chris Smith, the party's environment spokesman, will publish a self-financing 'green' plan to insulate and double-glaze every home in the country, creating 50,000 jobs.

This would be funded by allowing gas and electricity companies to levy a higher charge. Labour says the average family would save pounds 150 a year in energy bills. The party says that only 20 per cent of the 20 million homes in Britain are properly insulated.

Mr Smith said: 'It is a no-lose scheme, good for households, good for the environment and good for the utilities. If the Government does not take it up and run with it, it is even more stupid than I think it is already.'

Labour sources are defensive about suggestions that they are considering a switch from income tax to VAT and continued to insist yesterday that the only shift from direct to indirect tax actively being considered was the greater use of 'green' taxes, including taxes on polluting companies.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Sales Administrator - Fixed Term Contract

£17500 - £20000 per annum: Recruitment Genius: We currently require an experie...

Recruitment Genius: Partner Manager - EMEA

£50000 - £100000 per annum: Recruitment Genius: A Partner Manager is required ...

Recruitment Genius: Regional Sales Manager - OTE £100,000

£45000 - £100000 per annum: Recruitment Genius: A Regional Sales Manager is re...

Recruitment Genius: IT Support Engineer

£18000 - £22000 per annum: Recruitment Genius: The company provides IT support...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific