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Labour: Slash VAT to 5% for home improvements

Shadow Chancellor Ed Balls has urged the Government to give small businesses taking on new workers a one-year National Insurance tax break and called for VAT to be cut to 5 per cent for homeowners looking to make improvements to their property.

Speaking at the Labour Party conference in Liverpool today, Balls urged the Government to implement his five-point plan to help the economy grow and create jobs.

His proposals include a repeat of the bank bonus tax, an immediate reduction of VAT to 5 per cent for people who make improvements to their homes for one year, a temporary reversal of January’s VAT increase from 17.5 per cent to 20 per cent and a one-year National Insurance tax break for small firms taking on extra workers. He also urged the Government to bring forward long-term investment projects such as building schools and roads.

Balls said: “That is a plan to help struggling families and small businesses to get our economy growing and create jobs which are the key to getting our deficit down. Action on jobs, investment brought forward, support for families, support for homeowners, support for small businesses – five immediate steps the Government could take tomorrow. If they do so, we will back them.”

He also conceded that Labour did not “regulate banks toughly enough” or do enough to stop their irresponsible practices in Britain and the rest of the world.

Talking about the sale of government stakes in state-owned banks Lloyds Banking Group and the Royal Bank of Scotland, Balls said Labour would use any windfall from their sale to repay the national debt.

Balls also criticised the heavy cuts the Government has made to public spending, arguing that making such radical cuts so quickly would “choke off the recovery” in the economy.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Politics today is no longer about representing the electorate; such as the old days when Labour represented the working class and Conservatives were for the middle to upper class.

    Political parties today are simply “brands”; given professional makeovers by spin doctors, PR guru’s and motivational speakers.

    Quite simply, Labour is a tarnished brand. 13 years in government they nearly brought our country to it’s knees; Blair was a liar and Brown was a buffoon.

    Frankly, who cares what Ed Balls says or thinks anymore; or for that matter Ed “Wallace & Grommit” Milliband.

    Labour elected the wrong brother as their leader and it will be a VERY long time before we see another Labour government in this country.

  2. NONE of what Ed balls has suggested will resolve the mess that we are in, this is just ‘tinkering’ at the edge of a massive financial breakdown, for which the Labour party are hugely to blame. Don’t think the Conservatives are any better for that matter, just more and more meddling. The other problem is one cannot believe what one is told anymore, just look at tuition fees!
    Unless people have money to spare in their pockets, which most now don’t, the growth in this country will not happen in the near future.
    The obsession with low wage inflation and the high price increases in just about every consumable area is the problem, the two don’t match!!
    So carry on taxing us into oblivion and you will reap what you sow……….and the harvest has begun!

  3. That’s right….. and the Con-Dem….. sorry Conservative – Lib Dem coalition are doing such a good job in steadying the ship.

    The short termism of the current government is terrifying and you can’t help but think it’s going to leave us in as big a mess as the last Conservative government did.

    At least they’re honest huh…. course we won’t raise tuition fees……

  4. Excuse me Mr. Balls,

    Stop the gimmicks, this crisis needs a well thought out plan You see, the problem is that the vast majority are paying more taxes percentage-wise than you! and the rich.

    If you want millionaires and billionaires to pay more in taxes, then lead by example. Each year simply write an extra cheque to HMRC for what you feel is appropriate.

    And you gave that money instead to the country and way of life that feeds you, you’d still be donating money to a charity (our country) and you’d accomplish your desire to pay more in taxes.

    My guess is that you don’t like that suggestion because you wouldn’t have control over the money.

    Either way, forcing the rich to pay more taxes is NOT the answer.

    The answer is that taxes need to be CUT for the 99% of the population that does not make the kind of money you’re used to making.

    Heck, if you were to help get taxes cut for the majority think about how much more they could save for retirement or to improve there lifestyles here and now.

    It seems to me you got this backwards, big time. The rich don’t need to pay more in taxes. The middle and low income segments of our society need to pay less in taxes.

    And, please stop penalizing the rich, who provide most of the jobs in this country. Instead, I strongly suggest giving everyone else a break.

    That’s where your efforts should be directed. NOT toward sowing the seeds for class warfare,

    Consider a flat, consumption tax, with simple exemptions for the basic consumable necessities of life, such as food, shelter, water and energy.

    Get rid of the archaic, effectively illegal direct taxation of income system that we have now.

  5. Re anonymous 2:59pm.

    I think you might find that the when the Labour Govt took over in 1997 the finances of this country were in pretty reasonable shape.

  6. I think anyone who spouts off about raising taxes should have to give permission to HMRC to release a record of just how much in income tax that individual has paid each year and the register should remain on record ad infinitim. No breakdown, just a total figure.
    It should be mandatory for all Politicians and senior civil servants and ALL members of staff at the F-pack

  7. This isn’t an original Labour idea. The Builders’ Federation has been calling for exactly such a measure for well over a year (my builder told me so).

  8. I am currently having home improvementd done costing £20,000 of which of which nearly £3000 gone in VAT. 20% does not sound a lot untill you convert it to pounds, shilling and pence.

  9. Re anon.3.32PM,
    in 1997 the Labour Government was faced with a large structural fiscal deficit, low net investment, rising public debt and falling public sector net worth. This situation had come about in part as a result of a lack of clear and transparent fiscal objectives, The labour Government therefore took steps to implement a new framework for fiscal policy. The IFS concluded that By 2007–08, the public finances were in a stronger position than they had been when Labour came to power in 1997. Unfortunately a global financial crisis of epic proportions has changed all of that – hardly Gordon’s fault!

  10. At least the Tory’s don’t pretend to be something they are not.Labour pledge to be working class folk, yet the majority of the shadow cabinet went to Eton.

    Its just complete hypocrisy, it sums up the political system in this country. Corrupt, outdated and out of touch with the man (and woman) in the street.

  11. The problem with the political system is that it is so short termist. As in the USA, politicians look at the date of the next election and therefore set the targets accordingly. And of course, the next Government change the objectives and strategies! Also, most Governments in the last two years of possible power tend to entice voters rather than dish out the medicine.
    The coalition is equally as guilty. Sharp pain now with the intention of easing it off over the last two years prior to the election. Then they can ease the burden and say we have improved things…..
    No simple answer though is there?

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