What the Labour manifesto means for your finances: From income tax, to pensions and 'securonomics'
The Labour Party has unveiled its manifesto as Sir Keir Starmer hopes the desire for change will convince voters to put him in Downing Street this summer.
With the polls showing Labour is very likely to form the next government, taxpayers will be keeping a watchful eye on what the party's pledges mean for their finances.
Meanwhile, the Labour Party is very keen not to put off any of those considering voting for it.
The Labour leader has promised a 'tax lock' with no increase on rates of income tax, NI and VAT, while also protecting the triple lock for pensioners.
![Change: Sir Keir Starmer unveiled his manifesto with a pledge to not increase taxes](https://i.dailymail.co.uk/1s/2024/06/13/11/86067581-13525835-image-a-4_1718276064018.jpg)
Change: Sir Keir Starmer unveiled his manifesto with a pledge to not increase taxes
Starmer is also pledging to prioritise economic growth, with the launch of a national wealth fund and new housebuilding targets.
We look at what the proposed policies mean for your finances.
'Securonomics': Going for growth
Labour is promising to turn the page on Conservative ideas 'that have caused the chaos' and is prioritising economic growth and wealth creation.
Starmer told Labour supporters in Manchester that 'social justice and economic growth must go hand in hand.'
Figures from the Office for National Statistics released on Wednesday showed the economy recorded no growth in April, following growth of 0.4 per cent in March.
Starmer said the manifesto is a 'total rejection' of 'tax and spend' and he would prioritise wealth creation and economic growth.
The party's manifesto states that Labour's fiscal rules are 'non-negotiable and will apply to every decision taken by a Labour government.'
Its first steps will include delivering economic stability, with 'tough spending rules' to grow the economy and keep taxes low.
Its manifesto says: 'We will embrace a new approach to economic management - securonomics - that understands sustainable growth relies on a broad base and resilient foundations.'
Among its plans include a new industrial strategy and a National Wealth Fund to pay for ports and supply factories, new gigafactories, and help rebuild the steel industry.
Taxes: No increase in income tax, NI and VAT rates
Starmer has been adamant that taxes will not rise under a Labour government, despite plans for significant investment.
He has ruled out an increase in income tax, national insurance and VAT. The Institute for Fiscal Studies warned that this leaves no room based on current forecasts for any more spending than planned by the Conservatives.
The IFS added: 'And those plans do involve cuts both to investment spending and to spending on unprotected public services'.
But while there is a pledge not to raise tax rates, taxes will rise due to fiscal drag. Labour has previously said that it will go ahead with the Conservatives' planned freeze on income tax thresholds to 2028, which drags more of people's earnings into tax and pushes people into higher tax bands. The IFS estimates that it is equivalent to putting up income tax by 6p.
Business: Tax cap, VAT on school fees and higher minimum wage
For businesses, Labour will also cap corporation tax at the current level of 25 per cent and replace the business rates system to raise revenue 'in a fairer way,' but did not provide specific details.
Labour has also pledged to remove the VAT and business rates exemptions on private schools, meaning parents could pay up to 20 per cent more on fees.
Starmer intends to pay for his 'tax lock' and public spending with changes to the non-dom regime, which allows foreign nationals living in the UK to avoid paying tax on their overseas income.
Like the Conservatives, Labour said it will crack down on tax evasion and avoidance, raising around £5billion a year.
Labour also says it will ensure the minimum wage is a 'genuine' living wage.
It says: 'We will change the remit of the independent Low Pay Commission so for the first time it accounts for the cost of living.
'Labour will also remove the discriminatory age bands, so all adults are entitled to the same minimum wage, delivering a pay rise to hundreds of thousands of workers across the UK.'
Pensions: Commitment to triple lock
Labour has previously reiterated its commitment to the state pension triple lock, although it has not gone any further to protect the state pension from income tax.
The Conservatives have committed to a 'triple lock plus' if they are reelected, which pledges that the state pension is never taxed.
In the manifesto, Labour says: 'We will also undertake a review of the pensions landscape to consider what further steps are needed to improve pension outcomes and increase investment in UK markets.'
However, it has not committed to any specific reviews, but plans to reinstate the pensions lifetime allowance are not mentioned in the manifesto.
The Government abolished the old £1.073million lifetime allowance last year, but at the time Labour said it would bring it back if elected.
Housing: Affordable homes and mortgage guarantee scheme
Labour says the 'dream of homeownership is now out of reach for too many young people' and is pledging to build 1.5million homes over five years.
It says it will take action to ensure that planning authorities are strengthened in favour of development and support local authorities by funding additional planning officers.
It says it will take a 'brownfield first approach' and prioritise the development of previously used land, before looking at building on low quality 'grey belt' land.
Combined authorities will be given new planning powers too.
Labour has also pledged to 'deliver the biggest increase in social and affordable housebuilding in a generation' with changes to the Affordable Homes Programme to ensure more homes are built from existing funding.
For first-time buyers, Labour says it will work with local authorities to give them the first chance to buy homes.
It also says it will introduce a mortgage guarantee scheme to support first-time buyers struggling to save for a deposit.