The next general election is now about seven months away. So this autumn’s political conference season represent the parties’ final major gatherings before the polls open. First off was the Labour party, which remains ahead in the polls and the bookies’ current favourite. So what did we learn about a future Labour Government’s tax policies?
The honest answer is very little. In his conference speech Ed Balls:
- Acknowledged that the new parliament would start with a 2015/16 deficit of £75bn on current projections;
- Said that Labour “will balance the books in the next parliament”, although his definition of balance is a different one from that of Mr Osborne;
- Announced that ministerial pay would be frozen until the deficit was cleared;
- Revealed a 1% cap on child benefit increases for the first two years of the next parliament, saving £400m over the term of the next parliament – so roughly £80m a year.
Mr Miliband’s speech was hardly more enlightening:
- He promised a “clamp down on tax avoidance including tax loopholes by the hedge funds to raise over £1 billion” to provide extra funding for the NHS.
- A new tax on tobacco companies, also for funding the NHS.
- A mansion tax on homes valued at more than £2m. This too was earmarked for the NHS, although in a previous iteration the mansion tax was intended to fund the re-introduction of a 10% starting rate income tax band. The cost of that reincarnation is now to be met by scrapping the married couples’ tax break, due to begin next April.
Ironically, on the morning of the day Mr Miliband gave his speech, the Office for National Statistics published the latest Government borrowing figures showing that in the first five months of 2014/15. These revealed that the Government had borrowed £45.4bn, £2.6bn more than in 2013/14. Whichever party (or parties) form the next Government, it remains the case that if you want to cut your personal tax bill then, to borrow one of Ed Miliband’s conference tag lines, “you’re on your own.” Although, of course, we are happy to give advice.