Filed under: Tax
Labour has insisted there is a "better way" to tackle Britain's economic woes as it reopened a row over the top rate of income tax.The Opposition has launched a bid to tack an amendment on to the Finance Bill, which enacts this year's Budget, obligating the Chancellor to review revenues which could be raised by putting the 50p rate back for the 2014/15 year. The Labour plan would also force the Chancellor to report on the losses to the Treasury this year of cutting the rate to 45p at the 2012 Budget.
Despite repeated questioning of whether Labour would itself reinstate the 50p rate, shadow Treasury minister Cathy Jamieson said her party would not commit two years before a general election.
But she said her party's beliefs and principles were clear. "This Government has, as we said right at the outset, cut too far, too fast - we have had all the pain for none of the gain that the Government promised," she said. "Constituents we meet on a day-to-day basis, they know their living standards are dropping. They know the money in their purse does not go as far at the end of the week because prices are rising at a time when wages at best are stagnating and at worst are dropping.
"We believe there is a better way and there is an alternative. We have consistently said we would use a tax on those massive (bank) bonuses to fund a jobs guarantee for every young person who has been out of work for a year or more."
Ms Jamieson said the move was necessary because the trends in long-term unemployment remained "extremely concerning". She added: "The facts speak for themselves. They show the Government prioritises those at the top and leaves everyone else to struggle."
Shadow treasury minister Chris Leslie later called on the Treasury to publish calculations showing how much it would cost property owners if there was a "mansion tax" on properties valued at more than £2 million. Labour wants the money generated by such a levy - estimated to be around £2 billion by the Liberal Democrats - to be used to bring back a 10p income tax rate to help low-earners.
Mr Leslie moved an amendment in the Commons asking for proposals on a 10p rate and a mansion tax to be put before the Commons six months after the Finance Bill receives Royal Assent. The Labour MP said the Government has outlined in the Finance Bill a mansion tax on properties valued at more than £2 million which are owned by companies, known as the annual tax on enveloped dwellings.
Conservative minister David Guake, intervening, said to Mr Leslie: "You say the objective of Labour is to raise £2 billion. Our assessment is there are 55,000 properties worth more than £2 million in the country. We've got the finest minds on the treasury working on this and they've divided £2 billion by £55,000 - it does not require a huge amount of work - and you end up with an average of £36,000 a year as the annual levy. That's the average."
Labour tabled a further amendment to the Bill, which called on the Government to force multinational companies to publish a statement on how much corporation tax they paid in the UK. The amendment also called on the Government to work to set up a "global standard" for the public registration of companies, as well as working with developing nations to help them recover tax owed by multi-national companies.
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