Mansion Tax - Labour say yes

 
Ed Balls and Nick Robinson

Now Labour are backing a Mansion Tax and offering to work with the government to introduce it.

The shadow chancellor Ed Balls told me on a visit to the West Midlands that he will support a tax on expensive properties if the chancellor decides to back the idea promoted by the Liberal Democrats.

"If the chancellor wants to go down that road then we will support him. You've got to get the details right. You can't afford to have people thrown out of their homes because they can't afford to pay the tax. Don't mess this up. Let's work together".

However, Ed Balls insists that any money raised by a mansion tax should be spent on reversing cuts to tax credits and not cutting the top rate of tax.

"The issue is what's the purpose? If the purpose is to help families facing higher tuition fees, higher VAT or higher fuel bills - for example boosting their tax credits - yes. But if the priority is, as George Osborne seems to be saying, that he will only use the Mansion Tax to help people on incomes above £150,000 I say that is out of touch with the struggle families are facing and won't help get people into jobs."

I asked the shadow chancellor whether he still believed that the top rate of tax should be extended to those earning over £100,000 a year and not £150,000 as now - a policy he argued for in the Labour leadership election. He said that wasn't party policy and ruled it out for the future.

He repeated his call for a stimulus in the Budget to get the economy moving again insisting that the British economy was underperforming.

Update: 1738 GMT: Ed Balls set out his views on the top rate of tax in his Bloomberg Speech on 27th August 2010: "We need to do more to raise taxes fairly - such as starting the top rate of tax at £100,000."

After he became Shadow Chancellor he told Andrew Marr on 30th January 2011: "Well, look, that was what I was saying during a leadership election campaign. We've not sat down and discussed tax policy. Our position is clear: we think that for this parliament, and probably into the next, we'll keep the top rate of tax at £150,000."

A few days earlier - on the 25th January 2011 - he told the Daily Politics "I stand by every paragraph in that speech", although he may have meant every part of his warning that austerity was destroying confidence and growth and an economic stimulus was required.

 
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  • rate this
    +1

    Comment number 25.

    There is, however, perhaps a problem of legal principle.

    Under HRA1998 a person has a right to "peaceful enjoyment of possessions".

    A tax on them would arguably spoil that.

    Then again, there are the handy words "except in the public interest"...

  • rate this
    +5

    Comment number 24.

    IDB 23

    Miliband, Balls and co would then need to turn their blank piece of paper into more than protest policies and day to day opposition. They would also need to work harder to win Tory seats and stave off SNP in Scotland. If boundary changes got completed then a minority Tory govt could be another outcome from a pre 2015 election.

  • rate this
    +1

    Comment number 23.

    TGF 21
    I suspect Balls has an eye to the future with these remarks. Peter Oborne in the Torygaph today fortells the end of the Coalition by 2013 with Liberals looking to extend their shelf life. A lab/lib coalition could be just the thing. A lifeline for both parties and an end to the Tories. Win - win?

  • rate this
    +5

    Comment number 22.

    Quite clever of balls - puts a wedge between the coallition parties as GO will never introduce either a mansion or a wealth tax and gives the two eds another political angle of attack without the responsibility of ever having to introduce it themselves.

    As a matter of detail would it be easier just to introduce another domestic rate band ?

  • rate this
    +6

    Comment number 21.

    Balls can afford to throw around ideas to make Osborne's life difficult - that's the luxury of being shadow chancellor. Bit like when Osborne made Darling's life difficult with the £1m inheritance tax 'promise'. Oh while making his life easy by agreeing with the level of public spending and hence deficits being run pre global crash.

  • rate this
    +2

    Comment number 20.

    MfM 12
    Another poor rendition of the 'Tory Story'. Who had the most and bigger (by far) surpluses (spent less than raised) Labour 97-10 or Tories 79-97. Oh yes, it's another magnificent own goal from the Tory team.

  • rate this
    0

    Comment number 19.

    kayb 16
    Poor choice for an attack on Labour but perhaps you didn't know. Dave worked as a spad for Lamont of 'Black Wednesday' fame. Are you really that fond of self inflicted gun shot wounds in your foot?

  • rate this
    +7

    Comment number 18.

    Mark @ 12

    Just to get a little factual context into play (public sector databank, hm-treasury.gov.uk):
    Tories 92-97 add £180bn to debt
    Labour 97-07 add £150bn to debt (just under £500bn at that point)

    Both parties have been extraordinarily good at piling up our national debt.

    Agree you 4 above, that being better at collecting 50% rate is preferable to introducing yet another tax.

  • rate this
    -2

    Comment number 17.

    The 50% rate of income tax has to go. It's seen an exodus of hedge funds (for example) to Switzerland and many other businesses are questioning the UK as a place to operate. If a 'wealth tax' can allow the Libdems to reverse the 50p rate then so be it. It's far easier to collect as there IS a property and it has a value. Ed Balls shows from day to day how economically inept he truly is!

  • rate this
    +9

    Comment number 16.

    The fact , as you remarked on the news Mr Robinson, that Balls and Milliband used to help Gordon Brown prepare his budgets , just about sums up the value of any statement from these two. For advice of an economic nature, the last people one would ask for advice , would be any member of the most financially incompetent government it was ever this country's misfortune to be saddled with.

  • rate this
    +13

    Comment number 15.

    The best thing to come out of this coalition has been the realisation for us all that the LibDems are a disaster area. Cable's Mansion Tax would be bad news for the UK. How far we've come since 2 years ago in the election campaign when we thought Cable and Clegg were heros. The trebling of tuition fees showed them to be dishonest, this propsal shows them to be dumb

  • rate this
    +6

    Comment number 14.

    This would set a dangerous precedent in principle, given the political tendency for threshold creep.

    Today's Mansion Tax could become the Bedsit Tax of tomorrow.

  • rate this
    +13

    Comment number 13.

    Here is my prediction:

    1) The 50p tax rate will remain for the time being
    2) A mansion tax will not be introduced

  • rate this
    +10

    Comment number 12.

    It's irrelevant how much Labour raise in taxes as they will always spend above this amount.

    Despite 10 years of boom, they still ran up a £ trillion+ national debt.

    So raising tax is easy for them. It's not spending it all, then some more, that's their problem.

  • rate this
    +7

    Comment number 11.

    There's no justifiable basis for the "mansion tax" as I see it.

    Stamp duty was paid when the property was bought, and council tax is paid yearly based on the relative value of it. Why introduce a further tax, based simply on the fact someone owns a certain type of property without any regard to ability to pay ?

    Other than "you've got something and we want some of it".

  • rate this
    -1

    Comment number 10.

    Balls
    "But if the priority is, as GO seems to be saying, that he will only use the Mansion Tax to help people on incomes above £150K I say that is out of touch with the struggle families are facing and won't help get people into jobs."

    "Help people on £150K+?"
    Does it refer to a trade-off on 50% rate of income tax or the tax on pension relief scheme, and where does unemployment fit in?

  • rate this
    0

    Comment number 9.

    I suspect EdM's current enthusiasm for this is that he is hoping the Tories (ie. GO) will crash the housing market through it, along with the increase of stamp duty coming for the bottom of the market later this month.

    If market not crashed, then they can still use it when next in Government as a step-off point for re-evaluating all properties for Council Tax.

  • rate this
    +10

    Comment number 8.

    It might be better to tax the total value of property owned.

    From the BTL landlords with strings of mediocre properties, but extorting ridiculous sums from many people, it might bring a few onto the market at more affordable prices.

  • rate this
    +6

    Comment number 7.

    Not sure that switching from income to wealth is such a good idea. A lot of people bought their houses many years ago, finished paying their mortgages and due to the increase in property value, particularly in London, suddenly live in houses valued above £1.5 million that they could never afford today. Should they sell their houses to pay this new tax?

  • rate this
    +2

    Comment number 6.

    No3BMT,
    Forty per cent of Tory MPs have what is known as 'City' interests, and likely to be gaining personally from taxpayers bailouts, if so, they are professional scroungers. Some system to retrieve the money would help to reduce the deficit. They voted to take £94 per week from a certain group of cancer sufferers. We are of course 'all in this together'. Inquiry now!

 

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