What the Labour manifesto means for your finances: From income tax, to pensions and ‘securonomics’

The Labor Party has unveiled its manifesto as Sir Keir Starmer hopes the desire for change will convince voters to put him in Downing Street this summer.

With polls showing that Labor is very likely to form the next government, taxpayers will be keeping a close eye on what the party’s promises mean for their finances.

Meanwhile, the Labor Party is keen to deter those considering voting for the party.

The Labor leader has promised a ‘tax lock’ with no increase in income tax, NI and VAT rates, while also protecting the triple lock for pensioners.

Change: Sir Keir Starmer unveiled his manifesto promising not to raise taxes

Starmer also promises to prioritize economic growth, with the launch of a national wealth fund and new housing development targets.

We look at what the proposed policy means for your finances.

‘Securonomics’: Going for growth

Labor promises to turn the page on conservative ideas ‘that have caused the chaos’ and prioritize economic growth and wealth creation.

Mr Starmer told Labor supporters in Manchester that ‘social justice and economic growth must go hand in hand.’

This is evident from figures from the Office for National Statistics released on Wednesday The British economy showed no growth in Aprilafter growing 0.4 percent in March.

Starmer said the manifesto was a “total rejection” of “taxes and spending” and that he would prioritize wealth creation and economic growth.

The party’s manifesto states that Labour’s budget rules are ‘non-negotiable and will apply to every decision made by a Labor government’.

The first steps will include establishing economic stability, with “tough spending rules” to keep the economy growing and taxes low.

The manifesto reads: ‘We will embrace a new approach to economic management – ​​securonomy – that understands that sustainable growth rests on broad-based and resilient foundations.’

Plans include a new industrial strategy and a National Wealth Fund to finance ports, supply factories, build new gigafactories and help rebuild the steel industry.

Taxes: No increase in income tax, NI and VAT rates

Starmer is adamant that taxes will not rise under a Labor government, despite plans for significant investment.

He rules out an increase in income tax, national insurance and VAT. The Institute for Fiscal Studies warned that based on current forecasts, this does not leave room for more spending than planned by the Conservatives.

The IFS added: ‘And those plans entail cuts, both in capital expenditure and in expenditure on unprotected public services.’

But while there is a promise not to raise tax rates, taxes will rise as a result of the budget delay. Labor has previously said it will press ahead with the Conservatives’ plans freezing of income tax thresholds until 2028, which will send more of people’s income to taxes and push people into higher tax brackets. The IFS estimates that this is equivalent to increasing income tax by 6 cents.

Business: Tax ceiling, VAT on school fees and higher minimum wage

For businesses, Labor will also cap corporate tax at the current level of 25 percent and replace the business rates system to raise revenues “in a fairer way,” but did not provide specific details.

Labor has also promised to scrap VAT and business rates exemptions on private schools, meaning parents could pay up to 20 per cent more in school fees.

Starmer plans to pay for his ‘tax lock’ and government spending with changes to the non-dom regime, which will allow foreigners living in Britain to avoid tax on their foreign income.

Like the Conservatives, Labor said it will crack down on tax evasion and avoidance, raising around £5 billion a year.

Labor also says it will ensure the minimum wage is a ‘real’ living wage.

It says: ‘We will change the remit of the independent Low Pay Commission so that it takes into account the cost of living for the first time.

‘Labour will also remove discriminatory age limits so that all adults are entitled to the same minimum wage, delivering a pay rise for hundreds of thousands of workers across the UK.’

Pensions: commitment to triple lock

Labor has previously reiterated its commitment to the EU state pension triple lock, although it has not gone further to protect the state pension from income tax.

The Conservatives have committed to a ‘triple lock plus’ if re-elected, promising the state pension will never be taxed.

In the manifesto, Labor said: ‘We will also undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes and increase investment in the UK markets.’

It has not committed to specific ratings, however plans to reintroduce the lifelong pension benefit are not mentioned in the manifesto.

The government abolished the old £1.073m lifetime allowance last year, but Labor said at the time it would bring it back if elected.

Housing: Affordable housing and mortgage guarantee scheme

Labor says the ‘dream of home ownership is now out of reach for too many young people’ and promises to build 1.5 million homes in five years.

It says it will take action to ensure planning authorities are strengthened in favor of development and will support local authorities by funding additional planning officers.

It says it will take a ‘brownfield first approach’ and prioritize the development of previously used land, before looking at building on low-quality ‘grey belt’ land.

The combined authorities will also be given new planning powers.

Labor has also pledged to deliver ‘the biggest increase in social and affordable housing in a generation’ with changes to the Affordable Homes Program to ensure more homes are built with existing funding.

For first-time buyers, Labor says it is working with local authorities to give them the first chance to buy a home.

It also says it will introduce a mortgage guarantee scheme to support first-time buyers struggling to save for a deposit.