The Labour Party’s 2024 manifesto introduces a range of policies designed to shape the UK’s financial landscape. This guide delves into the key proposals that could affect personal finances, examining their potential impacts on taxation, housing, public services, and more. Whether you’re a first-time buyer, a tenant, or just a taxpayer, understanding these policies will help you navigate the financial changes on the horizon.
Taxation
No Increase in Major Taxes
One of the cornerstone pledges of Labour’s 2024 manifesto is the commitment not to increase National Insurance Contributions (NICs), Value Added Tax (VAT), or the main rates of income tax and corporation tax. This promise aims to provide financial stability and predictability for individuals and businesses alike. However, it’s essential to note the nuanced areas where tax changes are proposed:
- Private School Tax Exemptions: Labour plans to remove tax exemptions for private schools, which includes adding VAT to school fees and ending relief on business rates. This measure is expected to raise about £1.5 billion annually.
Windfall Tax
Labour proposes to raise over £6 billion by increasing and extending the Energy Profits Levy, a windfall tax on oil and gas companies. This tax targets the extraordinary profits made by these companies, aiming to redistribute wealth and support public funding .
Housing and Property
Support for First-Time Buyers
Labour’s “Freedom to Buy” scheme is a significant initiative targeting housing affordability. This plan includes:
- Extending the Mortgage Guarantee Scheme: Designed to help first-time buyers secure mortgages with lower deposits, making homeownership more accessible.
- Building 1.5 Million Homes: Over the next parliament, Labour aims to address housing shortages by increasing the housing supply.
- Taxing Foreign Buyers: Introducing taxes on foreign buyers to fund increased planning capacity and support local buyers.
Rental Reforms
Labour’s rental reforms are focused on enhancing tenant rights and improving rental property standards. Key proposals include:
- Abolishing Section 21 ‘No Fault’ Evictions: Ensuring tenants cannot be evicted without a valid reason, providing greater security.
- Enforcing Minimum Energy Efficiency Standards: By 2030, landlords must ensure their properties meet specific energy efficiency criteria.
- Enhancing Tenant Rights Against Rent Increases: Measures to protect tenants from unreasonable rent hikes.
- Implementing “Awaab’s Law”: Addressing issues like dampness and mould to improve living conditions in rented homes.
Leasehold Reform
Labour aims to replace the leasehold system with commonhold as the default tenure for flats, a move intended to:
- Eliminate Unfair Maintenance Costs: Providing a more equitable and straightforward property ownership model.
Public Spending and Services
Increased Funding for Public Services
Labour promises an additional £5 billion for health and education by 2028-29, reflecting a commitment to bolstering public services. The party plans to adhere to fiscal rules to ensure economic stability, including:
- Keeping National Debt in Check: Ensuring sustainable public finances.
- Maintaining Low Mortgage Rates: Supporting affordability in the housing market.
Green Investment
Labour’s green investment strategy focuses on positioning the UK as a leader in sustainable finance:
- National Wealth Fund: Funded by a windfall tax on fossil fuel companies, this fund aims to support green initiatives.
- Making the UK the “Green Finance Capital of the World”: Attracting investment in green technologies and projects.
Social Security and Benefits
No Specific New Taxes on Income
While Labour has pledged not to increase income tax rates, they may introduce measures that could indirectly affect income tax revenues:
- Reforming the Carried Interest Loophole: Targeting private equity and non-doms to raise additional revenue.
Economic Policies
Support for Financial Services
Labour aims to boost the financial services sector and support new technologies. Their proposals include:
- Investment in Financial Services: Encouraging growth and stability in the sector.
- Support for Open Banking: Promoting innovation and competition within financial services.
Conclusion
Labour’s 2024 manifesto presents a comprehensive approach to personal and national finances, focusing on stability, fairness, and investment in the future. By understanding these policies, individuals can better prepare for the potential financial changes ahead. For a more detailed analysis, refer to the full Labour Party manifesto and expert financial reviews, like the one from the Institute for Fiscal Studies (IFS).
