Labour Try To Show Economic Competence

Labour Try To Show Economic Competence

Today in Bedford Ed Miliband announced how he intended to raise living standards for the working poor, what was notable about this speech however was that is showed some economic competence it could even be described as the start of a credible economic plan.  The plan is to reintroduce a starter rate tax of 10p for those who earn between £10,000 and £12,500 this tax was abolished under the last Labour government.  This new 10p tax would affect around 25 million people who currently pay the 20p basic rate of tax and according to the daily politics, it would give people an extra £2 per week so around an extra £104 a year.  I don’t believe anyone would turn their nose up at an extra £104 a year and it may help to increase demand in the economy, but what shocked me was Labour had a credible plan to fund the tax which was not borrow more money.  Labour intends to implement the Lib Dem policy of a mansion tax for all houses over £2 million, and Ed Balls said the amount of people who would receive the new tax would be based on how much they would earn from the mansion tax.

So whether you agree with a mansion tax or like me disagree with it you will still say this policy sounds credible.  It will increase demand in the economy (probably not by that much but it would only be part of a greater economic plan) it shows Labour is on the side of the working poor by giving them a tax cut and most importantly they have explained how they will fund it.  This is all very good so far big thumbs up, however when Ed Balls was questioned how they would implement the mansion tax he had no idea of how it would be implemented.  Also he refused to say if the policy would be in the manifesto in 2015 so once you scratch the surface of the policy it is same old incompetent Labour.  To conclude I like the idea of returning to the 10p tax and the Conservative Voice group has been campaigning for such a policy, however I would rather see this funded through benefit reforms rather than a mansion tax.  However if even though I disagree with a mansion tax and think it would be a highly damaging tax hence counterproductive tax.  If Labour could come up with a plan to implement such a tax to fund the tax cut, this would be a step in the right direction for Labour in terms of economic competence although they still would have a long way to go, but at least they have found another source of income rather than borrowing.