Labour leader Ed Miliband yesterday unveiled controversial plans to force the City to pick up the bill for extra spending on the NHS if his party won next year’s election
Announcing a new levy on the profits of tobacco companies, the apparent scrapping of intermediary tax relief on derivatives and a tax on the owners of homes that are worth over £2m, Miliband promised to usher in a new political era and boost the number of nurses working in the NHS.
The speech drew immediate criticism from business leaders, who warned it lacked a credible economic basis, an accusation Labour has been desperate to avoid.
Confederation of British Industry director-general John Cridland said: “We heard very little about how to create the economic growth to deliver these ambitions.” And the Institute of Directors’ Simon Walker called for a more positive tone from Labour towards businesses.
A new tax on homeowners with a single property worth over £2m would hit Londoners hard, with property website Zoopla suggesting the capital and south east alone would contribute 96 per cent of the tax collected, expected to be £1.2bn a year, Labour says.
Tobacco manufacturers, whom Miliband said “make soaring profits on the back of ill health”, would also be expected to cough up around £150m for his government to spend on extra NHS staff. The Tobacco Manufacturer’s Association called the idea “anti-business” and “illogical”.
Investors who use contracts for difference (CFD) would be hit by plans to enforce stamp duty on CFD trading.
Market makers and their clients are currently exempt from paying the tax but enforcing it could raise £600m, Labour suggests.
Miliband’s speech failed to mention the UK’s giant deficit despite the issue being included in a text of the speech, an omission some have attributed to a mistake by the Labour leader.