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Labour Party promises ‘economic stability’ and cheaper energy bills in manifesto

Labour Party promises ‘economic stability’ and cheaper energy bills in manifesto
Matt Browning
Written By:
Matt Browning
Posted:
13/06/2024
Updated:
13/06/2024

Keir Starmer promised a return to “economic stability” in his Labour Party manifesto, with no major tax changes announced in his plan for Great Britain.

Labour was the last major party to announce their proposals should they win the general election on 4 July, following the Liberal Democrats, Green Party and Conservatives this week.

Unlike their political rivals yesterday, surprises were lacking in this manifesto, as Starmer confirmed several policies previously discussed during his election campaign.

One included the publicly owned Great British Energy, which aims to reform the energy market and provide cheaper bills for UK households.

The proposals, which involve partnering with energy companies, “will ensure a much tougher system of regulation that puts consumers first and attracts the investment needed to cut bills”, to be funded through windfall taxes on oil and gas firms.

In terms of deductions from your pay packet, very little will change as National Insurance contributions (NICs), income tax across all bands and VAT will remain the same under a Labour Government, following Tory plans to slash NI contributions by 2p.

Corporation tax will also be capped at 25%, the lowest of the G7, if Starmer gets the keys to Downing Street on 4 July.

Pension triple lock promised to stick at current level

As his rival Sunak promised a ‘triple lock plus’ for retirees aged over 66 years old, Starmer stuck to his commitment of keeping the pension triple lock in its present form.

The current scheme guarantees the state pension rises each year by the largest amount of:

  • Average earnings growth
  • The rate of inflation
  • Or by 2.5%

 

Meanwhile, the hopeful winner of the next election also said it will support families with children by launching a breakfast club in every primary school in the country.

In the housing sector, Starmer outdid his election counterparts and pledged to develop one-and-a-half million new homes, gazumping the Liberal Democrats, which committed to building 300,000 homes per year.

Labour also set out plans to increase the stamp duty surcharge for non-UK residents and make commonhold the default tenure in its manifesto.

Starmer pledged to “immediately update” the National Policy Planning Framework to restore mandatory housing targets.

The manifesto noted: “We will take tough action to ensure that planning authorities have up-to-date local plans and reform and strengthen the presumption in favour of sustainable development.”

It will fund additional planning officers and increase the rate of the stamp duty surcharge paid by non-UK residents.

Of Keir Starmer’s tax proposals, Laura Suter, director of personal finance at AJ Bell, said: “Labour has repeated its claim that it won’t raise taxes ad nauseam, but by not ending the freeze on income tax bands, it is bringing tax hikes in through the back door.

“While freezing the tax bands until 2028 is a Tory policy, Labour have made no commitment to undo it. It means that while it can avoid headlines about explicit tax increases, people will still be paying more in income tax than they would if Labour ended the freeze.”

Access to housing

The party said it would also deliver the “biggest increase in social and affordable housebuilding in a generation” by strengthening planning obligations and changing the Affordable Homes Programme.

“Labour will prioritise the building of new social rented homes and better protect our existing stock by reviewing the increased right to buy discounts introduced in 2012 and increasing protections on newly built social housing,” the manifesto stated.

It also pledged to work with local authorities to give first-time buyers the first choice of new homes, rather than being sold to international investors.

The manifesto confirmed the introduction of a permanent mortgage guarantee scheme to support first-time buyers. Starmer announced this move last week, which led to brokers saying it only addressed part of the problem surrounding access to homeownership.

Since its introduction in 2021, the mortgage guarantee scheme has supported 42,836 completions, accounting for 1.3% of the UK market.

Protection for tenants and homeowners

The manifesto stated the party would “bring the injustice of ‘fleecehold’ private housing estates and unfair maintenance costs to an end”.

It pledged to get rid of Section 21 ‘no-fault’ evictions, and prevent private renters from being “exploited and discriminated against”. Labour proposed to bring in measures to enable tenants to challenge unreasonable rent increases and extend Awaab’s Law to the private rental sector.

Starmer also promised to review how to protect leaseholders from costs associated with improving building safety and speed up the pace of remediation.