A Labour government will build a strong economic foundation and balance the books
Part of our plan to build an economy that works for working people
The next Labour government will reduce the deficit fairly and sensibly, and without extreme spending cuts that would put our National Health Service at risk.
David Cameron claims the economy is fixed, but the recovery hasn’t reached most working families. At the same time, he has failed to eliminate the deficit as promised — it currently stands at over £75 billion.
But our ambition is to do more than eliminate the deficit: we will build an economy that works for working families, where hard work is rewarded and we all have the opportunity to share in the prosperity of our country.
To secure the long-term health of our economy, we will support the creation of high-skill, high-wage jobs that will allow our communities to thrive. Here is how a Labour government will deliver a strong economic foundation for Britain:
We will balance the books without extreme spending cuts
- We will cut the deficit every year with a surplus on the current budget and get the national debt falling as soon as possible in the next Parliament.
- We will make fair and sensible spending decisions, including capping social security spending so that it is properly controlled, stopping the payment of the winter fuel allowance to the wealthiest five per cent of pensioners and capping child benefit rises for the next two years.
- There is not a single policy in this manifesto that is funded by additional borrowing. There are tough decisions to be taken and we haven’t made any commitments that we can’t keep.
- We will make sure that any profits made from returning the bailed-out banks to the private sector are used to reduce the national debt.
- We will save money by reforming old government bureaucracies, devolving power and services to our towns and cities, and redesigning public services.
We will create a fairer tax system
- We will reverse the Government’s top-rate tax cut, so that those with incomes over £150,000 contribute a little more to help get the deficit down.
- We will abolish the non-dom rules so that those who live permanently in the UK pay tax in the same way as the rest of us.
- We will close tax loopholes that cost the public billions of pounds a year, and we will bring in tough penalties for those who abuse the tax system. This will include ending unfair tax breaks used by hedge funds, and cracking down on disguised employment. We will make it harder for tax dodgers to hide their identities by making country-by-country reporting information publicly available.
- We will introduce a lower 10p starting tax rate to help those on middle and lower incomes, which will be funded by ending the Conservatives’ Marriage Tax Allowance. We will not increase the basic or higher rates of income tax or national insurance.
- We will not raise VAT, nor extend it to food, children’s clothes, books, newspapers or public transport fares. This is the tax that hits pensioners and the poorest hardest.
- We will end unfair tax breaks used by hedge funds and others, and we will crack down on disguised employment.
- We will make it harder for tax dodgers to hide their identities by making country-by-country reporting information publicly available and requiring the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of the real owners of companies based in them.
- We will carry out an immediate review into the culture and practices of HMRC so that everyone follows the same rules, and we will increase the rigour of the tax system.
We will make sure hard work is fairly rewarded
- We will increase the National Minimum Wage to more than £8 an hour by October 2019 to help ensure that those doing a hard day’s work are rewarded for doing so.
- We will ban exploitative zero-hours contracts so that anyone working regular hours for 12 weeks or more will have the right to a regular contract. This sort of job insecurity creates an unnecessary strain on family life.
- We will promote the Living Wage by giving a tax rebate to companies that sign up to become Living Wage employers in the first year of the next Parliament. We will also require listed companies to report on whether or not they pay the Living Wage and use government procurement to encourage more employers to pay it, following the lead of Labour councils across the country.
We will fix the broken markets that fail the millions of families who rely on them
- We will freeze gas and electricity prices until 2017 and give the regulator the power to cut bills this winter. We will reform the broken energy market so that families and businesses get a fair deal.
- We will introduce a fairer deal for renters, including a ceiling on excessive rent rises, and we will make stable three-year tenancies the rule, not the exception. We will ban rip-off letting fees.
- The generation and supply businesses of the ‘Big Six’ energy companies will be separated. They will be required to open up their books and they will have to sell their electricity through an open exchange.
- We will simplify tariffs and make it easier for people to compare prices and get the best deal.
- We will protect small businesses by ending unfair contracts and automatic rollovers to more expensive tariffs.
- We will create a tough new energy watchdog to enforce our reforms. It will have the power to strip energy companies of their licences if they repeatedly harm the interests of consumers, and it will also be responsible for protecting off-grid households.
We will back our entrepreneurs and businesses
- We will build a strong economic foundation, cutting the deficit every year with a surplus on the current budget and national debt falling as soon as possible in the next Parliament.
- We will tackle rising business costs, by maintaining the most competitive corporation tax rate in the G7, cutting and then freezing business rates for more than 1.5 million small business properties and freezing their energy bills.
- We will make it easier for firms to get the finance they need to grow and create jobs, by establishing a British Investment Bank with a mission to lend money to small- and medium-sized businesses and support a network of regional banks.
- We will meet Britain’s long-term infrastructure needs by setting up an independent National Infrastructure Commission to plan for those needs and hold government to account.
- We will tackle skills shortages, ensuring all young people study English and maths to 18 and introducing a gold standard vocational route, including a plan to create thousands of new apprenticeships.
- We will support access to international markets by returning Britain to a leadership role in a reformed European Union.