Ed Miliband backs 'mansion tax' to fund 10p tax rate return


Ed Miliband : "Labour is on the side of working people "

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A Labour government would seek to re-introduce the 10p starting rate of tax scrapped by Gordon Brown in 2008, Ed Miliband has announced in a speech.

Mr Miliband said it was a "very bad mistake" to get rid of it and the move would send a "clear signal" his party was on the "side of working people".

The move, worth about £2 a week for people, would be funded by a "mansion tax" on £2m properties, he said.

But No 10 said it was a "stunning admission of economic incompetence".

The decision to scrap the 10p tax band - announced in the 2007 Budget as part of a package which also saw the basic rate of tax reduced from 22p to 20p - was highly controversial.

Despite measures to compensate those affected, critics said up to 500,000 people were left worse off.

Mr Miliband said the move was "wrong" as the 10p tax rate made a difference to people on low incomes and increased incentives to work.

He said he was "determined to put it right" by reinstating the 10p rate after the next election and urged the government to consider doing it at next month's Budget, describing it as the "progressive choice".

'Fairer taxes'

"We would put right a mistake made by Gordon Brown and the last Labour government," he said.

"We would use the money raised by a mansion tax to reintroduce a lower 10 pence starting rate of tax, with the size of the band depending on the amount raised. This would benefit 25 million basic rate taxpayers."


  • Most people have a chunk of their income which is tax free - known as the personal allowance, In 2007, this was worth £5,225 and has since risen to £8,105.
  • Before April 2008, everyone paid 10p on the next £2,230 of their income, only rising to 22p above this level.
  • But after the 10p tax band was axed, everyone paid 20p on their earnings above the personal allowance until they hit the higher rate 40% band
  • In 2012-3, the 20% rate applies to the first £34,370 of income above the personal allowance

Labour has previously indicated it would only set out tax and spending commitments in the run-up to the next election - scheduled in 2015 - and Mr Miliband made it clear that he would not commit to put any specific policies in its manifesto at this stage.

But Mr Miliband said the 10p pledge would send a clear message about Labour's commitment "to a fairer tax system and improving the living standards of working people" as well as showing the party is "moving on from the past".

Shadow chancellor Ed Balls said both he and Ed Miliband had raised objections to the 10p move when they were members of the cabinet at the time.

Asked on the Daily Politics whether it was a firm manifesto commitment, Mr Balls said they could not write their manifesto now, but the changes were something "we want to do... intend to do... plan to do" if the party gets into power after the next election.

The idea of a mansion tax was first proposed by the Lib Dems before the last election although the Conservatives oppose the move and the policy was not adopted by the coalition government.

Mr Balls said there were about 70,000 homes currently worth more than £2m - half of which were second homes - and a tax could raise an estimated £2bn.

He said the detail "had to be got right" but he would be willing to talk to the Lib Dems who he suggested were "still keen" on the idea.

In the speech, Mr Miliband also repeated his support for a temporary cut in VAT to boost economic growth - and called for action on train fares, "unfair" bank charges and capping interest on payday loans.

'Never so good'

Criticising the government's economic policy as a "race to the bottom in wages and skills", he accused the Conservatives and Lib Dems of rewarding those at the top while "squeezing" everyone else.

Speaking in Bedford, where in 1957 Conservative Prime Minister Harold Macmillan famously said Britons had "never had it so good", the Labour leader said that falling wages and rising prices mean many now feel "they will never have it so good again".

Danny Alexander MP: "Strong case for an additional levy on the highest level properties"

"People in Britain are putting in the hours - doing the shifts - as never before. But something has changed in the last few years.

"There's less chance of promotion, less chance of a pay rise, and at the same time, prices just go up and up and up: petrol for the car, tickets for the train, childcare for the kids, deposits for a first home.

"The 'squeezed middle' has never been so squeezed - and it looks like it will be that for years to come."

He criticised the government's decision to scrap the 50p tax rate for those earning over £150,000 from April 2013, saying "we can't succeed as a country just by hoping wealth will trickle down from those at the top to everyone else".

'Labour's mess'

A Downing Street spokesman said Labour's change of tack on the 10p rate was "a stunning admission of economic incompetence" and the coalition had helped low earners by substantially increasing the personal allowance - the level at which people start to pay tax - to £9,205 in April.

"The losers from Labour's 10p tax fiasco have become winners under this government," he said.

He also warned that a mansion tax "would mean government snoopers in every home to revalue your house for council tax, meaning council tax rises for anyone who's improved their home in the past 20 years".

Lib Dem Treasury Secretary Danny Alexander said Labour were "late to the party" on the need to reduce the tax burden on the lowest paid.

"After thirteen years in government, the only action Ed Balls took was to raise the amount of tax those on low incomes paid by abolishing the 10p rate. It was the biggest tax mistake they ever made and it has taken them until now to realise their error."


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  • rate this

    Comment number 1286.

    #1264 i've never read the daily mail in my life...I was a lifelong labour voter...but i've looked around i've seen what labour has done to this country,they wont ever get my vote again.

  • rate this

    Comment number 1285.

    I think Labour are quite possibly doomed until they get DAVID Miliband as leader.

  • Comment number 1284.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 1283.

    If the 10p tax rate was to fix the economy then I am sure it would be in by now...Politicians are absolute fools drooling over the spilt milk. When Oh When will these idiots get their heads together rather than squabble with each other whilst the rest of us go cold. No wonder the turn out rate is in the teens% as opposed to the 60% like it used to be.

  • rate this

    Comment number 1282.

    I supported torries last election "for change" means good change but now the economy on its knees,rise in tution fees,no permanent jobs in the market,most benefits have been cut,NHS is under threat, and moreover the national debts are increasing. In global economy race we already gone to 6th or 7th positon,If this continues w'll go further down in 2 years,past 3 yrs we've seen"dimnishing change"

  • rate this

    Comment number 1281.

    It's great the way the Labour party thinks. Bankrupt the country, whinge when not re-elected about the nasty Tories and then promise the Earth to get elected again. The main reason the Tories are seen as nasty is because they have to pick up the pieces after Labour's last disaster - EVERY TIME. Somehow they get voted back in, lather, rinse and repeat ad infinitum.

  • rate this

    Comment number 1280.

    #1091 The only nonsense is quoting economic statistics without context.

    1992/3 were deep recessionary years followed by recovery. Govt should run a deficit followed by a slow improvement in finance.

    2005-7 were allegedly good years only then did recession kick in. Labour should have run a balanced budget for 3 out of the 5 years

    Lab lost control of budget before the crash

  • Comment number 1279.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 1278.

    Conservatives can sometimes seem a bit clueless and incompetent but Labour are downright dangerous and damaging to this country.

    Conservatives may not seem to know the best way forward but Labour are hell-bent on going backwards. If Labour get back into power it will be nothing short of catastrophic for this country.

  • rate this

    Comment number 1277.

    What's all this rubbish on here. Gordon Brown abolishes the 10p rate and Tories oppose it. Ed Miliband wants to bring it back and the Tories oppose it. This is all a game. All both parties have to offer is years of austerity. Fortunately I live in Scotland, things will be different here soon. You voted for Cameron, you are welcome to him. We have more sense.

  • rate this

    Comment number 1276.

    '...determined to put it right..'

    Is that a pledge?

    Or promise?

    Or the first signs of a policy?

    Good luck Mr Milliband. Theres a whole lot more of Labours 'mistakes' that needs to be put right rather than just the reintroduction of a tax rate.

    Still we all have to start somewhere I guess.

  • rate this

    Comment number 1275.

    I see some left wing comments on here have branded people racist when mentioning immigration, but Ed apologised in a speech not so long ago about Labour's immigration record & said it was ok to talk about immigration, I thought this was now official policy or is it a lie? Does that mean that Ed's apology & proposals today are a lie? Hmmm I am torn between who to believe now, what a conundrum!

  • rate this

    Comment number 1274.


    Would you care to answer the previous post I made regarding how the current lot increase the tax allowances?

    Not a Con voter, but I would vote for any party available before voting for the highway robbery Labour Party.

    Step back from the Labour Party. See what they do to the little folk. Take with one, give with the other. Waste of your money. Waste of space.

  • rate this

    Comment number 1273.

    I know its been said a 1000 times before, but...

    they really did choose the wrong Miliband

  • rate this

    Comment number 1272.

    'The facts are this is an extreme right wing govt'



    You obviously wouldn't know 'extreme' if it spanked you right in the chops. You got any more 'facts' for us to laugh at?

  • rate this

    Comment number 1271.

    Back to the neeedless Brown type complication of the UK tax system. Better to put personal allowances up than tinker with this again. If they were so worried about the regressive nature of the UK tax system, they should merge the NI system with it. NI is currently standing at 25.8% emloyers and employees combined and is the biiggest stealth tax and the biggest ponzi scheme known to man.

  • rate this

    Comment number 1270.

    You assume all those that live in a 2million house are wealtthy, In the end it will mean less big houses as they are all turned into flats.

    4 Hours ago

    Nice to see the Tory trolls are busy this morning. So what exactly is wrong with the policy of taxing Mansions owned by a very small minority, to help pay for a tax cut for every tax-payer in the UK ?
    Well done Ed, keep it up

  • rate this

    Comment number 1269.

    @ 2. Sevy Dadourian
    ""Labour has no credibility on the Economy. Does he really think our memories are that short or that we are stupid? Never again will I trust Labour on the economy.""
    Funny, people used to say exactly that about the Torys. So yeah I think people do have very short memories... There is no one worth voting for.

  • rate this

    Comment number 1268.

    Any version of Labour that the banks, the city, big business PLC, the USA and Mr & Mrs Smug of Surbiton all feel they could happily live with is not one I would vote for.
    Lets have the Labour party back to something it's founding fathers and the creators of the NHS would recognise!!

  • rate this

    Comment number 1267.

    You do have to feel a bit sorry for him... He doesn't event sum up enough energy to dislike him, he is just utterly irrelevant.


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