Extra funding for the NHS and cuts in tuition fees will be paid for by a ‘mansion tax’ on properties worth over £2m and restricting tax relief on pension contributions for the highest earners respectively, the Labour Party’s 2015 election manifesto has pledged.
The document, published today (13 April), sets out leader Ed Miliband’s vision to “change the way the country is run and who it is run for”.
The controversial mansion tax was confirmed, in order to pay for 8,000 more GPs, 20,000 more nurses and 3,000 more midwives as part of a £2.5bn fund for the health service, also contributed to by a a levy on tobacco firms and by tackling tax avoidance.
Labour also pledged to cut tuition fees from £9,000 to £6,000 a year, funded by restricting tax relief on pension contributions for the highest earners by decreasing the annual allowance and the lifetime allowance and clamping down on tax avoidance via a review of HMRC.
This is likely to mean a reintroduction of the high income excess relief charge, first floated in 2009.
Sticking with pensions, the statement detailed plans to reform the market so that “pension providers put savers first and protect consumers from retirement rip-offs”, adding that the party would require disclosure of voting by institutional fund managers on executive pay.
Mr Miliband also supports greater flexibility for those drawing down their pension pots, the so-called pension ‘freedoms’ which came into force last week, but added that there must be “proper guidance” for people to avoid mis-selling.
Speculation will abound as to whether this will mean changes for the Pension Wise service that has been the subject of much criticism, in part because of the rushed way it was launched.
On housing, Labour committed to making sure at least 200,000 homes a year get built by 2020 - almost double the current level - by implementing the recommendations of the Lyons Review, an independent review of housing.
Some of the recommendations include attracting small and medium-sized builders back into the market, get councils to build homes again and to make better use of housing associations.
“To help young people and families get on the housing ladder, we will give local authorities the power to give first call to first-time buyers on new homes in areas of housing growth,” the statement read.
“We will unlock a Future Homes Fund by requiring that the billions of pounds saved in Help to Buy Isas be invested in increasing housing supply.”
For the 11m people who rent privately, Labour said it will legislate to make three-year tenancies the norm if it wins power next month, with a ceiling on excessive rent rises of 1 per cent above inflation.
“A ban on unfair letting agent fees will save renters over £600,” it added, also promising to drive standards up by creating a national register of private landlords.
Elsewhere in the manifesto, Mr Miliband reiterated a recent pledge to abolish non-dom status, along with the 50p tax rate on incomes over £150,000 a year. He also ruled out any increase in VAT and national insurance.
Finally, his party would also stop winter fuel allowance for the richest 5 per cent of pensioners, while guaranteeing no other changes to winter fuel payments, free TV licences or bus passes for the elderly.
The Conservatives manifesto is due to be published tomorrow and is already known to include a pledge to fund the £8bn shortfall identified in the annual NHS budget by the end of the next parliament, though how this is paid for is not yet known.
George Osborne already announced a reduction in the annual allowance for pensions and the last Budget and he has confirmed the party will also restrict the rate of relief offered to additional rate taxpayers earning more than £150,000 a year to pay for a new IHT allowance for £1m homes.
peter.walker@ft.com
