A speech given by Labour’s shadow chancellor Ed Balls at Labour’s conference has outlined a new plan involving five actions designed to boost the UK’s economy.
The plan proposes to take the following actions: reducing VAT levels back to 17.5%; allowing small businesses to take a one year tax break on their National Insurance; creating new jobs by starting long term projects such as building new schools; using money from the taxing of bank bonuses to build affordable houses and provide jobs for young people and bringing VAT down by 5% on home improvements and repairs.
Labour has argued that these actions will boost the economy and, should the coalition make these movements, the labour party would be in full support. In addition, Mr Balls has claimed that Labour would not necessarily undo all of the actions already taken by the coalition however; they would create stricter spending rules and ensure that any unexpected earnings from the sale of bank shares would be used to repay the UK’s debt.
Mr Balls went on to confess that perhaps Labour did not do a perfect job with regards to how public money was spent, how immigration levels were regulated and how bank activity was monitored, but stated that nevertheless, the current government are not exactly dealing with the economic crisis particularly well. He claimed that the spending cuts being made are damaging to the country’s chances of a recovery and the emphasis should be on how to balance helping the economy grow, with reducing the deficit already incurred, and focus should not be placed entirely on the latter.
However, the Conservatives have not responded positively to Labour’s ideas, claiming that the notion of a VAT reduction is ludicrous as firstly, it could not be funded and secondly, it would add over £12Bn to the country’s deficit this year. A spokesperson for the conservative government also claimed that Labour has purposefully cheated imposed fiscal rules in the past and therefore, the public should not trust the promises being made by them.
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