'We will bring back 10p rate of income tax': Ed Miliband makes audacious bid to outflank David Cameron

 

A future Labour Government would bring in a 10p lower rate of income tax funded by a mansion tax on homes worth more than £2m, Ed Miliband announced today.

In the first clear sign of Labour’s tax policy, Mr Miliband admitted that Gordon Brown was wrong to abolish the 10p starting rate of tax in his last Budget as Chancellor in 2007.  His announcement comes amid growing Tory pressure on George Osborne to announce a 10p rate in next month’s Budget, although the Chancellor’s allies are playing down the prospect. Instead, the Coalition is committed to raising the threshold at which people start to pay tax to £10,000 by 2015.

Mr Miliband embraced the Liberal Democrat plan for a mansion tax, which the Conservatives have blocked inside the Coalition.  Under the Lib Dem plan, a 1 per cent annual  levy would be imposed on the value of the home above £2m.  So a £3m home would face a £10,000-a-year bill.

Labour sources said its proposed 10p band would apply to the first £1,000 of taxable income, and be worth about £100 a year to the 25m basic rate taxpayers.  The mansion tax would apply to about 70,000 homes and raise about £2bn a year, they said.  Although Mr Miliband stopped short of saying the plan will be in Labour’s 2015 election manifesto, it looks certain to a flagship commitment.

The Labour leader said that, while resources would be scarce after the 2015, choices could still be made. He announced: “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 10p starting rate of tax, with the size of the band depending on the amount raised.  This would benefit 25m basic rate taxpayers.”

Speaking in Bedford, the Labour leader  recalled that Harold Macmillan, the former Tory Prime Minister, made a speech there in 1957 telling Britons they had “never had it so good.” He said: "Far from feeling they have never had it so good, millions across Britain today fear 'they will never have it so good again.’ ” 

Warning that most families are now facing a growing crisis in living standards which will last for years to come, Mr Miliband said: “There is a big choice that will dominate the next election. It is a choice between two different visions of our economy.

"The Conservative vision of a race to the bottom in wages and skills, rewarding those at the very top but leaving everyone else squeezed as never before. Or the One Nation Labour vision. We believe that our economy will only prosper when the vast majority of the people of this country prosper too. We believe it is when working families have confidence and security; when they can invest in their future; and when they can start businesses of their own that Britain will succeed.”

The Labour leader 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, not just a few at the top. A recovery made by building not squeezing the middle. A recovery made by all of us playing our part."

After criticism that Labour lacks policies, aides said Mr Miliband was setting out the clear difference between a One Nation Labour agenda for economic recovery made by the many, not just a few at the top - and a Conservative strategy that consists of trickle-down from the top, a squeeze on the middle and a race to the bottom.

Mr Miliband warned: “We cannot go on with an approach that simply promises more of the same: year after year of squeezed living standards for the majority of working people. Because it's wrong for them and because it's wrong for our economy."

He added: “The ‘squeezed middle’ has never been so squeezed. And if we carry on as we are it will be like that for years to come.It’s no wonder our economy isn’t growing when people can’t afford to buy the things that British businesses try to sell.”

Mr Miliband reiterated that a Labour Government  would take action 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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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: Account Manager

£20000 - £35000 per annum: Recruitment Genius: This full service social media ...

Recruitment Genius: Data Analyst - Online Marketing

£24000 - £35000 per annum: Recruitment Genius: We are 'Changemakers in retail'...

Austen Lloyd: Senior Residential Conveyancer

Very Competitive: Austen Lloyd: Senior Conveyancer - South West We are see...

Austen Lloyd: Residential / Commercial Property Solicitor

Excellent Salary: Austen Lloyd: DORSET MARKET TOWN - SENIOR PROPERTY SOLICITOR...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there