How does Labour plan to raise taxes and spend?

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This is Money

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4.1 • 650 Ratings

🗓️ 22 November 2019

⏱️ 33 minutes

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Summary

Labour's election manifesto has been revealed and it involves a huge £82.9billion spending spree – to be funded by a similar tax rise.

It outlined a 45p income tax rate above £80,000 and to leave no one in any doubt about its intentions opted to call its new 50p level above £125,000 the Super-Rich Rate.

On this podcast, Simon Lambert, Georgie Frost and Lee Boyce run through the main financial points of Labour's manifesto, with a look at all the parties' plans due at a later date after the Tory manifesto lands.

They look at the other Labour moves, including for capital gains will be taxed at the same level as income – with the annual allowance axed - sending the current 10 and 20 per cent CGT rate for investors in shares and funds – and 18 and 28 per cent for property investors - up to 20, 40, 45 or even 50 per cent.

Entrepreneurs would lose their special 10 per cent capital gains tax rate that rewards them for building businesses. Dividends would also be taxed the same as income, with the dividend allowance removed.

Inheritance tax reforms would be reversed, taking the amount a married home-owning couple can potentially leave tax-free down from almost £1million to £650,000.

Elsewhere, corporation tax will rise to 26 per cent, VAT will be added to private school fees, second home council tax will treble, 10 per cent of company shares will be put into employer funds with workers and the state sharing dividends, and a transaction tax would be brought in for the financial sector.

On the other side of the coin, Labour has promised billions for the NHS, infrastructure, public sector pay rises, free broadband for all, a rent cap for tenants and to nationalise the energy, water and rail industries.

The team also discuss the Conservative's bid to fend off an NHS winter crisis caused by pension taper rules that are forcing older doctors to avoid doing work so that they do not get hit with big tax bills.

Also on the agenda, how buy-to-let repossessions are rising as landlords feel the squeeze and why falling house prices in London and South East mean some families are managing to reclaim inheritance tax after homes sell for less than originally thought.

And finally, we discuss the reg plate lotto, where drivers can try to win an entire lifetime's worth of free petrol or diesel, worth almost £280,000.

Transcript

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0:00.0	Welcome to This Is Money. I'm Georgie Frost and alongside me and editor Simon Lambert today is Assistant Editor Lee Boyce.
0:06.9	And we have an election coming up and we did promise that when we had the manifestos that we would cover them and we are still waiting on the Tories.
0:15.2	But that doesn't mean that we can't give you a quick update on the Lib Dems and Labour.
0:19.3	So we will do that today. Also, the Health of Britain's
0:23.3	rental sector is in decline. Inheritance tax rebates are up, fears of a winter NHS crisis
0:29.9	related to pensions, and what is the registration plate lotto? All that and plenty more. Don't forget
0:35.8	you stay up to date with all the latest breaking money news. Just go to this ismoney.co.uk or download the app. But first, Simon did
0:45.4	assure you last week, as much as we may wish to that we haven't forgotten about the upcoming
0:52.0	election, we have been waiting for something to actually get our teeth
0:56.2	into and to chat about, i.e. the manifestos. We're still waiting, as I mentioned, just then,
1:01.2	on the Conservative Party, but we did get the offerings from the Lib Dems and Labour this week.
1:07.0	So when we have the full set, I'm right in thinking, Simon, we will deliver that properly, a proper rundown.
1:12.9	But just a quick teaser, if you would, the standouts of what we've heard so far.
1:19.6	Money, money, money. We're going to get loads of money. Everything's going to be paid for us for a week.
1:23.8	The NHS is going to be flush, right? Should we start with Labour?
1:27.3	Yes, indeed. The people
1:28.6	accused this week by the Prime Minister Boris Johnson of having a magic money forest, not just a
1:34.2	magic money tree, although it should be noted that Mr Johnson is making some pretty bold promises
1:39.8	about the number of people that he's going to put in the NHS, so he thinks that he has a magic
1:44.1	GP tree, it seems.
1:46.2	But yes, Labour's was launched today to much fanfare for the many, not for you, as I quipped,
1:53.0	because there was a tweet linking to it, which everybody tried to click on the link, and you couldn't get in,
	...

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