Features

Ed Miliband’s 100 days – and the first Ed Balls Budget

There will be tax rises to suit every taste. But the people he’s expecting to pay will probably just leave

11 April 2015

9:00 AM

11 April 2015

9:00 AM

Here’s what to expect

52p top rate of tax

Ed Balls won’t be looking for money when he says the ‘additional’ top rate of tax will go back up — there’s no evidence it will raise any. Top-band income tax will be 50p, which added to the extra 2p National Insurance would give Britain an effective top tax rate of 52 per cent. If it’s a temporary measure, as Balls has hinted, one-percenters will defer bonuses and disappear from the statistics (a problem, when they pay £1 in every £4 of income tax). If it’s permanent, they may scarper. If Balls really wanted to raise money from the rich he’d cut the 45p rate. But what he’s really after is banking public support by banker-bashing.

Corporation tax

In his first Budget, Ed Balls would raise corporation tax by 1 per cent to 21 per cent, the first increase since 1973. And that might just be the start. Any rise could mean less employment and lower pay: the CPS estimates that putting the rate up could cost 96,400 jobs in the next Parliament. The coalition has been cutting corporation tax and employment has risen by 1.9 million.

Mansion tax

If you enjoy council tax and stamp duty, you’ll love this. Labour’s mansion tax will be like a council super-tax on homes worth more than £2 million. Ed Balls says that houses worth over £2 million will pay £3,000 a year, amd won’t be drawn on higher bands. But he wants £1.2 billion a year out of around 100,000 homes — meaning an average charge of £12,000. One of those paying will be Ed Miliband, unless he sells his house; it will be little comfort to Cameron and Clegg that they just miss out.

Fewer new schools, less choice


No new schools could open in areas with ‘spare capacity’ (i.e., places to fill in bad schools). This means less parental choice, especially in poorer areas where demand for new schools is highest.

NHS reform put into deep freeze

Tony Blair wanted to let NHS patients opt for private hospitals: why should only the rich get Bupa? Miliband has signalled that this is heresy: expect it to be reversed.

A government-created high street bank

If you thought bankers were terrible, wait until you see the government have a go at their jobs.

10p tax rate

It took Gordon Brown eight years to correct his mistake in introducing a 10p starting rate of tax. Labour wants to make it again, using money from scrapping the married couples’ tax allowance. It needlessly complicates the system. Why not just raise the personal allowance?

Energy price ‘freeze’

Expect fuel companies to put up their prices, to ensure this comes at a higher level.

Bank bonus tax

Ed Balls would sting banks with a one-off 50 per cent levy on discretionary bonuses to employees — who will then be taxed on the bonuses too. The tax will include ‘allowances’ — the loophole banks use to sidestep EU limits on bonuses. Banks and bankers will have to find another way to keep their money — perhaps by leaving the UK.

Non-dom status abolished

Ed Balls himself was opposed to this one as recently as January. ‘If you abolish the whole status, then probably it ends up costing Britain money,’ he said. Then, he rightly feared a flight of talent. Now, he doesn’t seem to care.

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Show comments
  • Peter Stroud

    Perhaps Balls doesn’t care because he fears he will be returned to the back benches if Miliband becomes PM.

  • Des Demona

    ‘The people he expects to pay will probably just leave”

    And your evidence for this is what? The super rich love it here thanks to the security, justice system, infrastructure and financial security largely paid for by our taxes. You seriously think they will up sticks because they have to pay a few grand extra in taxes, which is loose change for them.
    Get real.
    The same claptrap was spouted when the rate went up to 50p.

    • Mr TaxPayer

      The super-rich don’t pay UK taxes anyway; they’re all non-doms; rich butterflies who blow in and out on the wind. It’ll be the moderately well off and mobile that will go. The entrepreneurs, SME owners, engineers, doctors and other professionals. The people that we NEED. The people that I aspire to be. Instead of looking at working harder I’m looking at emigrating.

      • Des Demona

        Emigrating? Where do you fancy?
        Germany -45%
        Australia – 49%
        Austria – 50%
        China – 45%
        Denmark – 61%
        Finland -62%
        Israel – 50%
        Japan – 50%
        Luxembourg – 52%
        Norway – 47%
        Portugal – 54%
        Spain – 52
        Sweden – 57%
        USA – 55%
        OR OF COURSE YOU COULD TRY
        Yemen -15%
        Ukraine – 15%
        Paraguay – 10%
        Guatemala – 7%
        Bulgaria – 10%
        Take your pick

        • Mr TaxPayer

          Canada? And I’ve lived in Germany; at least the Germans give you something for the money, like clean streets, decent public transport and a health service that serves you and not itself.

          • Des Demona

            Canada 50% plus various surcharges.
            Yep Germany has great public transport, That’s state ownership for you.

          • Mr TaxPayer

            Ah state owned railways; Like SouthEastern, Arriva and Chiltern. Owned by the French, Dutch and German states. And then EDF and nPower…

          • Des Demona

            As far as I recall it was the Tories who privatised rail and energy and let other state owned companies take over. Perhaps you should take it up with them?

          • Alexsandr

            state owns the railways here. Its called network rail.

          • Farage’s Fried Chicken

            Mate, listen: Singapore and a bank account in Panama.
            You cannot say you haven’t been f e c k i n told.

            This message was sponsored by H . . . (have a guess).

          • post_x_it

            Not so. German public transport was once the envy of the world. I use their rail system regularly, and for the last 5 years or so it has been in meltdown. They used to apologise for a 2-minute delay, whereas now you’ll struggle to get on a train that’s not at least half an hour late or even cancelled at short notice. That goes from the ICE all the way down to the S-Bahn in several cities. The train from Frankfurt centre to the airport is no longer a viable option, because instead of running at 15-minute intervals it turns up randomly whenever it feels like it. Never mind the ownership struture, Germany (much like the UK in the 1990s) has underinvested in its transport system for the last 15 years, and the chickens are coming to roost.

          • Hamburger

            You are mistaken about Germany.

        • Hototrot

          You missed out Ireland with a top rate of 41%

          • Des Demona

            And people leaving the country in droves to come here.

        • Alexsandr

          have you factored in NI. and employers NI which of course the employee pays through lower wages. Someone on 40K has a marginal rate of tax of 62%

        • ROUCynic

          It’s almost as if if your want any level of public service you have to pay for it! Why haven’t we been told?

        • ArashUK

          seems you have not heard of Ireland, Singapore, Hong Kong, UAE. Qatar, Russia and Cyman Island and do not think for a second that the above countries are less open than huge overregulated welfare states of the west.

    • GUBU

      The top 10% of taxpayers contribute 55% of the annual take in terms of income tax.

      One could therefore plausibly argue that what security, justice, infrastructure and financial security you enjoy is largely paid for by their taxes.

      By all means, let’s get real – perhaps we could start by noting that, despite the claptrap spouted by various people, reducing the 50% rate actually resulted in a higher tax take.

      So, tell us what you want. Higher rates of taxation, or more tax?

      • Des Demona

        Ummmmmm – it only resulted in a higher tax take in one year as the rich deferred their bonuses until the following year at the reduced rate.

        The IFS and HMRC estimate the reduction to 45p costs the treasury £100 million annually.

        http://www.ifs.org.uk/budgets/budget2012/budget2012jamesbrowne.pdf

        In addition only a small fraction of the top 10% of earners are in the top tax bracket. Only 1% of all taxpayers in fact. So not really applicable to your argument, no?

        • GUBU

          The £100m figure was an estimate which, by its own admission, could not fully account of the wider impact of one specific change on other tax revenues, behavioural changes on the part of taxpayers in the longer term, or the impact of anti avoidance measures announced in the 2012 budget. Hardly conclusive then, but if it works for you…

          My original percentage was perhaps the wrong illustration to offer. But, if anything, the further you narrow the percentage of taxpayers under consideration, the more disproportionate their overall contribution to the take from income tax becomes, and the less plausible the argument that such people somehow live off the collective largesse of the rest of us – which was one thrust of your post – becomes.

          • Des Demona

            It is not disproportionate if they have most of the money.

    • ArashUK

      it is your imperialistic illusion that they will stay whatever the conditions, just look at France to see what happened and you can see many of their talented in London streets. Just a matter of time to see more Britons in Singapore. You seem dont know that there has been an emigration among the talented for years and UK is not in her glorious days of 1900.
      Those few pounds mean millions of pounds that they could spend much better rather than giving to an inefficient welfare state.

  • Farage’s Fried Chicken

    **There is no evidence 52p will raise any more tax**

    **There is no evidence a mansion tax will raise any more tax.**

    **There is no evidence any tax will raise any more tax.**

    FFS, only the last statement is true in Torytrollland which is avoiding the issue.

    • davidofkent

      You are exactly the sort of person that Aristophanes was thinking of when he coined the new Greek word ‘Nephelokokkygia’. He probably wouldn’t have expected the level of abuse from you that you offer to anybody else who does not share your views.

      • Farage’s Fried Chicken

        How tragic you f e c k i n missed to mention my dear personal friend Sophocles. He will be really peeved off.

    • ArashUK

      there are plenty of historical and logical evidences. it is your problem if you have not heard of them

  • Peter Bering

    The British have been leaving without(!) media coverage for 20 yrs+. The Professionals and middle class people in general have been sadly emigrating and draining Britain in great numbers and been replaced by Muslims and a few thousand ultra rich foreigners pricing everyone else out of London. The country is run exclusively by a giggling Oxbridge set jolly happy just to float on top as everything crumbles below them.

  • James

    Written in the future? Hmmm…
    Aside from that, everyone knows that a Labour government would be an omnishambles, but yet the sheeple still keep voting for them.

    • Adam

      Is that an unironic use of the word ‘sheeple’ in 2015? Dear me, James, get with the times.

  • saffrin

    What’s the odds on the first budget Ed Balls thought about was how much to spend on his Ministerial office?
    Dreamer.

  • davidofkent

    Labour’s instincts are to play to the masses by pretending to squeeze the rich. They know perfectly well that nothing good will come of it, but they are addicted to this form of politics. Sadly, the evidence of polls suggests that a lot of people do think that money grows on trees (in the gardens of the rich).

  • pobinr

    Ed Millionareband has made it quite clear that Labour do not believe the British public should have the democratic right to decide via a referendum on whether their country can return to being a self governed nation with it’s own borders & it’s own fishstocks & democracy, or alternatively continue towards becoming a mere province of the EU dictatorship.
    .
    Labour stand for ever more cheap imported labour from Europe driving down wages & taking jobs & homes just to make low wage employers richer, which is the opposite of socialist principles !
    .
    Miliband says he will control this mass influx of cheap labour, but that’s a lie. We cannot while we are in the EU.
    .
    Vote Labour if you are like higher house prices, more traffic jams, more full schools, more English countryside built on. A new house needed every seven minutes due to mass immigration.
    Vote Labour if you hate Britain & British working class people & hate democracy.
    .
    Nigel Farage sums up the EU here brilliantly
    24 mins in – ‘The EU is proposing taking another Trillion Euros from European taxpayers despite the fact that the accounts haven’t been signed off for 18 years in a row. If the EU was a company all the directors or in this case the Commisioners would all be in prison’
    https://www.youtube.com/watch?v=bJHETdxwv8Y
    .
    Nigel Farage of UKIP exposes the unelected crooks & recycled Communists running the EU >
    http://www.youtube.com/watch?v=YWSYMpuCFaQ
    .
    50 years of LibLabCon treachery > https://www.youtube.com/watch?v=uyBr9RNx4k0&feature=youtu.be

  • Terry Field

    THE Debt profile is ruinous. It has come about as a result of continuous – since 1945 – debt issuance to buy the votes of the increasingly ill-educated, unproductive and economically worthless but left-voting proletariat.
    This fantasy-fest is over, but the game still has life, with the prospect of super-progressive taxation of all forms of assets and income; not to pay down the debt, but to continue the mass vote buying that the left wing parties rely on.
    After that, collapse is unavoidable; it will be precipitated by the reduction in the size of the economy, capital flight, social breakdown, and the Argentine-like desperation of the enormously enlarged numbers of the poor, work-free, effectively dispossessed.
    This election demonstrates the developing insanity of the desperate – the idea that tax takes will fall but that is good because ‘fairness’ is increased means the population, to a very large degree, is cretinised, and more suited to living in a kindergarten than in an adult world.
    I have shifted my resources away from this madness, and thank the day I decided to leave the bloody madhouse.

  • ItsAlreadyTooLate

    Is this the same excuse that we have with bankers, that they have golden hellos, golden middles and golden goodbyes, otherwise they will go somewhere else?

  • James

    Labour inspire me with confidence over the economy – I particularly like the policy of growing money on trees and persecution of anyone that has worked hard to get on in life.

  • ROUCynic

    “As
    for the idea that abolition will trigger a flood of non-doms seeking
    sanctuary in Switzerland, some footloose individuals may leave. But the
    many advantages of London as a financial centre do not dissolve simply
    because of a change in a hitherto generous tax treatment of resident non
    domiciles. Low-tax cantons cannot match the City’s deep pool of
    financial expertise or the excitement of London life.”

    Some lefty Labour mouthpiece? The FT actually –
    http://www.ft.com/cms/s/2/9545f01c-be78-11e4-8036-00144feab7de.html#axzz3Wn4OZawQ

    Read it and weep!

  • Adam

    Well we’ve been hearing that Britain is getting full, driving out a few arseholes can only be a positive, right?

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