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Miliband pledges £2.5bn tax package for NHS

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23rd Sep 2014
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A £2.5bn tax package will fund a transformed NHS with “time to care”, Ed Miliband has told the Labour Party conference.

The Labour leader set out six national goals including transformation of the National Health Service. A tax package worth £2.5bn would finance a “time to care” fund to support 3,000 more midwives, 5,000 more care workers, 8,000 more GPs and 20,000 more nurses, Miliband said.

“We’ll clamp down on tax avoidance, including tax loopholes for the hedge funds, to raise over £1bn. We will use the proceeds of a mansion tax on homes above £2m and we will raise extra resources from the tobacco companies who make soaring profits on the back of ill health.”

Miliband believes the mansion tax will raise around £1.4bn and the tobacco levy £150m, the Guardian reported. The tax avoidance measures include steps to prevent umbrella companies being used by firms to avoid tax and NICs by exploiting expenses rules.

The paper noted that Conservatives are certain to challenge his figures, and that nearly 80% of the estimated 97,000 properties worth over £2m are in London.

‘Political stunt’

The proposed mansion tax will have a minimal impact on NHS budgets and the revenue raised may be cancelled out by loss of revenue elsewhere, property experts have warned.

Council tax on high-end property is low, said Ian Fletcher, director of policy at the British Property Federation, and is in “desperate need” of reform.

“Instead of responsible reform, however, we get a mansion tax and a political stunt,” Fletcher said.

“Raising taxes to save the NHS is a tactic Labour used in the early noughties. Labour obviously calculates that associating a policy with the NHS will make it popular, but there is no obvious link and a much better use of any available funds would be to spend them on access to housing, thereby improving peoples’ health outcomes.”

David Whiscombe, director of tax at chartered accountants Berg Kaprow Lewis, said the proposed tax was “flawed on many levels”. A wealth tax that targets one very specific type of wealth makes no sense, he said, “especially when the wealth targeted is illiquid and produces no income”.

The Centre for Policy Studies suggested yesterday that Labour tax policies “could cost the UK over 300,000 jobs and more than £25bn in GDP”.

Replies (5)

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By Justin Bryant
23rd Sep 2014 17:20

I agree this mansion tax idea is bonkers

The latest tax figures in the link below show that SDLT is now raking in about £1bn per month. This mansion tax could end up causing less SDLT to be collected through depressing £2m+ house prices and transactions. Wouldn't it be better and easier to just raise the SDLT rate on £5m+ homes to 8%, £10m+ homes to 9% and £20m+ homes to 10%? No-one (apart from the Candy brothers et al perhaps) would complain about that.

https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-...

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ghm
By TaxTeddy
24th Sep 2014 08:10

Changes Afoot

It worries me slightly that these type of "soak the rich" policies are floated by mainstream political parties. It seems to fly in the face of working towards economic recovery.

However, politics aside, I fear there is worse to come - particularly for the Scots if the Marxist SNP are still in power when Scotland is handed proper tax raising powers, rather than just rate-tinkering.

I suppose I'm looking a gift horse in the mouth as it could mean much more tax planning work. But, call me old fashioned, I prefer a stable and predictable tax system to attract inward investment.

Or maybe I'm just getting old.

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By Lancaster
24th Sep 2014 10:10

Why worry

With the two Eds blocking "English devolution" and trotting out tired old socialist ideas I don't think the electorate will be daft enough to elect them. I have no doubt that as the election approaches, Labour will recycle Alex Salmond's scare stories about the NHS being privatised. 

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By AndyC123
24th Sep 2014 16:46

Invariably......

 

Spending plans turn out to under-estimate the amount that will be spent.

Taxing plans over-estimate the amount of tax that will be gathered.

 

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By Jekyll and Hyde
25th Sep 2014 08:34

oh goodie, it's that run up to election time again
its now started, pledge on this, pledge on that. tax on this to get votes, relief on that to get vote.

then the usual June statements, oh our pledges are not possible anymore..

same old rubbish this time of the political calender.

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