'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.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
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

Solutions Architect - Permanent - London - £70k DOE

£60000 - £70000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

General Cover Teacher

£110 - £130 per day: Randstad Education Reading: Great opportunities for Cover...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Maths Teacher

£110 - £130 per day: Randstad Education Reading: QTS Maths Teachers needed for...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?