The Labour Choice on Tax – Tax Cuts for Millions, not Millionaires – my speech in Leeds

Thank you Veronica for that introduction.

We’ve worked closely together in your work for the Alzheimer’s Society and I know how passionate you are about stopping our precious NHS going backwards. We all know you will make a brilliant MP for Elmet and Rothwell.

And we need you in Parliament after 7 May to stand up for your constituents and vote for our jobs guarantee for young people, to vote to repeal the Tory NHS privatisation legislation and to vote to scrap the hated and unfair bedroom tax.

And thank you to all of you for coming here this morning and giving up your Bank Holiday. Although there is, of course, a General Election on!

We all know this is set to be the closest and most important election for very many years. And what better place to talk about why Britain can’t afford five more years of the Tories than Leeds – where five years ago we threw out a failing Tory-Liberal Democrat coalition.

A city where, despite George Osborne heaping much bigger cuts on to our policing, and fire services and local government services than many other parts of the country, Leeds City Council, led by Keith Wakefield, has led the way in the north, bringing the Tour de France here last year and now Google too, investing for the future and just a fortnight ago getting an outstanding grade for our children’s services.

I want to talk today about why – here in Leeds, in Yorkshire and across the UK – we can’t afford five more years of the Tories.

And with today marking the start of the new tax year, I want to set out:

-          the true impact of the government’s choices over the last five years, including the tax changes coming into effect today – with millions paying more while millionaires pay less;

-          how David Cameron and George Osborne are planning to do the same all over again if they get another five years;

-          and Labour’s better, fairer and more balanced plan, which will put working people first and save our National Health Service.

MILLIONS PAYING MORE

First, this Tory-led government’s record.

David Cameron and George Osborne are going round the country – including today – telling people they’ve never had it so good.

How out of touch can they get?

The truth is millions are worse off because of this government’s choices.

Working people have now seen year after year of bills going up faster than wages – with earnings after inflation down £1600 a year since 2010.

But it’s not just wages which have been squeezed.

Families and pensioners are paying more because of the VAT rise – David Cameron’s first broken promise.

And millions of working people have had their tax credits and childcare support cut too.

The rise in VAT alone has cost a couple with children £1800 over the last four years – and that’s according to the Treasury’s own figures.

Childcare support cut for working parents cut by up to £1560 a year because of the reductions to the childcare element of working tax credit.

Half a million families across the UK hit by the bedroom tax, including 7,000 here in Leeds and more than 45,000 across Yorkshire and the Humber.

And more than 3 million working families, including over 40,000 here in Leeds and 300,000 across our region, have seen their tax credits cut in real terms over the last few years.

David Cameron and George Osborne are telling people they’ve raised the personal tax allowance, but they won’t admit that for millions of people this has been more than wiped out by their VAT rise and tax credit cuts.

It’s the same old story with the Tories – give with one hand, take much more away with the other hand.

Families are £1100 a year worse off on average – the true cost of this Tory Chancellor, as our poster shows.

These are independent figures from the Institute for Fiscal Studies, which take into account all of the changes introduced by David Cameron’s government from May 2010 to today – including the changes to the personal allowance.

Here is what the IFS says:

“Tax and benefit changes introduced by the coalition have reduced household incomes by £1,127 a year or 3.3 per cent on average.”
The IFS also exposes how families with children have been hit hardest of all:

“For middle and higher income families with children… loss of tax credits and child benefit has more than offset the effect of income tax cuts.”
And their damning conclusion is this:

“Low-income households with children lose the most as a percentage of their income from changes implemented by the coalition.”

MILLIONAIRES PAYING LESS

And while millions are paying more, millionaires are paying less.

Remember when David Cameron and George Osborne said ‘we’re all in this together’?

We don’t hear them saying that line any more.

Because two years ago today they gave the top one per cent of earners in our country a £3 billion a year tax cut.

A £3 billion a year giveaway, while millions are paying more.

For someone with an income of £1 million that’s a tax cut of £85,000 over the last two years.

For someone earning £5 million it’s a tax cut of £485,000.

And for someone earning £10 million it’s a tax cut of £985,000.

That infamous omnishambles Budget of 2012 didn’t just try to introduce the pasty tax and the caravan tax, it was the final confirmation that these were the same old Tories – on the side of the few, not the many.

As Tory MP Robert Halfon, now George Osborne’s own Parliamentary Private Secretary, said just a few weeks before that Budget, cutting the 50p top rate of tax:

would allow our opponents to re-characterise the Conservatives, as being the party of the rich – for the few, not the many. The signal that such a tax cut would give to the public – many on average wages of £20,000, struggling with rising prices, would be that Conservatives were looking after vested interests

He was right.

The mask slipped as David Cameron and George Osborne ditched the idea that we are ‘all in this together’ and looked after their friends first.

Cutting the top rate of tax for the very highest earners, while raising VAT on families.

It’s the Tory way: millions pay more, millionaires pay less.

ANOTHER FIVE YEARS – MILLIONAIRES PAY LESS

And let’s look at what another five years of the Tories will bring.

Only yesterday George Osborne repeatedly refused to rule out cutting the top rate of tax again for the very richest. David Cameron refused to rule it out as well.

We now know this is their secret plan – another big tax cut for millionaires.

How can this be fair when families here in Leeds and across the country are still struggling and are £1100 a year worse off on average?

How can this be fair when our National Health Service is in crisis and going backwards?

And how can this be fair when we still need to get the deficit down and the Tories are now planning deeper cuts in the next three years than the last five years?

We know that David Cameron had originally wanted to cut the top rate to 40p, rather than 45p.

And just last year Tory Mayor Boris Johnson urged the Tories to “open up some more blue water, and cut the top rate back to 40p”.

We know why they won’t rule it out, because it’s what they’re secretly planning for after the election.

And if they did so it would mean an even bigger tax giveaway for top earners.

For someone earning £1 million it would mean a total gain of £340,000 over the course of the next Parliament from Tory cuts to the top rate of tax.

Meanwhile someone earning £5 million would get a total tax cut of £1.94 million and someone earning over £10 million would gain a total of £3.94 million by 2020.

And for all the embarrassment for David Cameron as one of his Yorkshire Conservative Parliamentary candidates defects to UKIP today during the election campaign – a huge blow for David Cameron…

… we all know the truth – UKIP and the Tories stand for the same policies on NHS privatisation and tax cuts for the very richest too.

No wonder David Cameron and George Osborne won’t rule out a Tory-UKIP coalition after the election.

We know the Tories and UKIP are preparing to work together – and now David Cameron must stop ducking the questions and come clean on their plans.

ANOTHER FIVE YEARS – MILLIONS PAYING MORE

And while millionaires will pay less, we also know millions will end up paying more.

In last month’s Budget the Tories confirmed plans which go beyond simply balancing the books.

Plans for extreme spending cuts which are a grave threat to our living standards and our public services.

As the independent Office for Budget Responsibility said, these Budget plans will mean “a sharp acceleration” in cuts to public spending.

They mean deeper spending cuts in the next three years than the last five years.

In fact, as the Institute for Fiscal Studies said, the Budget plans mean spending cuts after the election twice as deep as anything seen in the last five years.

Just think what that would mean for policing, defence, social care, for the services that people rely on.

And the Tories have also made £10 billion of unfunded tax promises – which they have still not told us how they will pay for.

That’s why people will conclude that to make their sums add up the Tories will end up putting our NHS at risk and raising VAT again.

Of course the Tories will deny it. They’ll point to David Cameron’s desperate and panicky promise not to raise VAT at his last Prime Minister’s Questions.

But we’ve heard it all before.

In 1979 the Tories said they had no plans to raise VAT – and they almost doubled it within weeks of the election. The Tories broke their promise.

In 1992 John Major told the House of Commons: “there will be no VAT increase”. But a year later the Tories put VAT on gas and electricity bills. The Tories broke their promise again.

And in 2010 David Cameron also told the British people he wouldn’t raise VAT. This is what he said:

We have absolutely no plans to raise VAT. Our first Budget is all about recognising we need to get spending under control rather than putting up tax.”

But just a few weeks after the election that’s exactly what he and George Osborne did in their first Budget – raising VAT from 17.5 per cent to 20 per cent and hitting the living standards of millions of people.

The Tories have broken their promises on VAT again and again and again.

And that’s why people will never trust the Tories on VAT again.

Because rather than asking those with the broadest shoulders to make a greater contribution, VAT has always been the Tory tax of choice.

At this election the Tories still have £10 billion of unfunded tax promises which they cannot explain how they will pay for.

And everybody knows the only way the Tories can make their sums add up is to raise VAT again after the election.

£10 billion is the equivalent of a two per cent rise in VAT. The Treasury’s own figures show this would mean a tax rise of £360 a year for a couple with children – a VAT rise of £1440 over four years.
Tory governments always raise VAT.

They did it last time and if they’re given another chance they’ll do it again – hitting millions of pensioners and working families.

It’s the Tory way: millions pay more, millionaires pay less.

LABOUR’S BETTER PLAN

But it doesn’t have to be like this.

We need a better plan.
While millionaires are paying less, millions of working people are paying more under this government.

So our manifesto will make clear commitments to the British people.
We will not raise VAT. We will not raise national insurance. And we will not raise the basic or higher rates of income tax.

And Labour can make these manifesto commitments for the next Parliament because, unlike the Tories, all of our promises are fully funded and paid for.
Where we need to raise extra revenue for Labour’s better plan we have been clear where it will come from:

-          A mansion tax on properties over £2 million, a levy on the tobacco companies and closing tax loopholes to save and transform our NHS with an extra 20,000 nurses, 8,000 more GPs and cancer tests guaranteed in a week;

-          A one-off tax on bank bonuses to fund a paid starter job for every young person out of work for 12 months or more – which they will have to take up;

-          Not going ahead with a further cut in corporation tax for large companies, but instead cutting and then freezing business rates for small firms;

-          Reducing the amount of pension tax relief given to the highest earners to pay for a cut in tuition fees to £6,000 – cutting not only the burden of debt on graduates, but reducing the national debt too;

-          Reversing the top rate tax cut – the Tory tax giveaway for millionaires – to help get the deficit down in a fairer way;

-          Closing tax loopholes and scrapping the shares for rights scheme so we can scrap the unfair and hated Bedroom Tax;

-          A higher bank levy to pay for expanding free childcare for working parents of three and four year olds – from 15 to 25 hours a week – to help make work pay and help parents balance work and family life.

All of our plans are fully costed and paid for. And none of our manifesto commitments will need a penny of additional borrowing. Not a single one.

What a contrast to the Tories.

With their £10 billion of unfunded commitments – and with the Institute for Fiscal Studies dismantling their totally false claims about Labour last Monday – it’s now clear why David Cameron and George Osborne have been so desperate to block our plan to allow the Office for Budget Responsibility to independently audit the manifesto commitments of all the main parties.

This is a Prime Minister and Chancellor running scared of their record and running scared of scrutiny too.

And we will do one other thing too.

We will scrap the perverse and unfair marriage tax allowance and make a fairer choice instead.

This is supposed to be David Cameron’s flagship family policy.

But the Treasury’s own figures show that two-thirds of married couples and five out of six families with children won’t be helped by it.
Women abandoned by their husbands, widows, and those who’ve fled from an abusive partner won’t get it either.

And 84 per cent of people who benefit will be men.

So we will scrap this policy and use the money to instead introduce a lower 10p starting rate of tax – which will help more married couples, more women, more families and more working people.

A Labour tax cut for millions of working people on middle and low incomes.

It’s all part of our plan to back working families who are struggling after five years when bills have risen faster than wages:

-          Expanding free childcare for all working parents of three and four year olds to 25 hours a week;

-          Increasing the minimum wage faster than earnings – rising to £8 an hour before 2020;

-          Giving tax breaks to firms who start paying the living wage;

-          Banning exploitative zero-hour contracts and ensuring that workers who work regular hours get a regular contract;

-          Freezing energy prices so bills can fall but not rise and giving the energy regulator tougher powers so that when wholesale costs fall, bills for families and pensioners fall too;

-          And backing first-time buyers and dealing with our housing crisis by getting at least 200,000 new homes built a year, as Ed Miliband set out on Saturday.

A better and fairer plan for millions, not just millionaires.

Because Labour knows what when working people succeed Britain succeeds too.

CONCLUSION

So the choice at this general election is clear.
A choice between a Conservative Party which has a track record of breaking their promises on VAT and will raise it again after the election – or a Labour Party which has never raised VAT and will not raise VAT.

A Tory way which means millions pay more while millionaires pay less, or Labour’s plan to back millions of working people, save our NHS and balance the books in a fair way.

A Labour plan which backs the many, or the same old Tories always standing up for the few.

That’s the choice in five weeks’ time.

After five years of the Tories millions are paying more while millionaires pay less.

Another five years of the Tories will mean deeper spending cuts, another VAT rise for millions and another tax cut for millionaires.

We need Labour’s better, fairer plan.

Tax cuts for millions, not millionaires. On the side of the many, not just the few.

Because when working people succeed Britain succeeds too.

Thank you.

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Posted April 6th, 2015 by Ed