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Ed Miliband backs mansion tax on homes worth over £2m Ed Miliband backs mansion tax on homes worth over £2m
(7 months later)
Ed Miliband has made a bold policy grab by announcing Labour will back a mansion tax aimed at homes worth more than £2m, with the money raised used to restore the 10p tax rate abolished by Gordon Brown in 2007.Ed Miliband has made a bold policy grab by announcing Labour will back a mansion tax aimed at homes worth more than £2m, with the money raised used to restore the 10p tax rate abolished by Gordon Brown in 2007.
Miliband said: "We would put right a mistake made by Gordon Brown and the last Labour government. A 'one nation' Labour budget next month would lay the foundations for a recovery made by the many, not just a few at the top"Miliband said: "We would put right a mistake made by Gordon Brown and the last Labour government. A 'one nation' Labour budget next month would lay the foundations for a recovery made by the many, not just a few at the top"
Miliband stressed his plans did not amount to a manifesto commitment, but sent out a strong signal and message about the priority he attached to the low paid.Miliband stressed his plans did not amount to a manifesto commitment, but sent out a strong signal and message about the priority he attached to the low paid.
Speaking in Bedford, Miliband said: "Let me tell you about one crucial choice we would make, which is different from this government.Speaking in Bedford, Miliband said: "Let me tell you about one crucial choice we would make, which is different from this government.
"We would tax houses worth over £2m. We would use the money to cut taxes for working people. 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."We would tax houses worth over £2m. We would use the money to cut taxes for working people. 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.
The Liberal Democrats have previously had sole ownership of the mansion tax policy, first advocated by the current business secretary, Vince cable.The Liberal Democrats have previously had sole ownership of the mansion tax policy, first advocated by the current business secretary, Vince cable.
Cable said: "I'm glad Mr Miliband has adopted it. I haven't been able to persuade my Conservative colleagues. I never give up hope."Cable said: "I'm glad Mr Miliband has adopted it. I haven't been able to persuade my Conservative colleagues. I never give up hope."
Miliband did not set out the rate of the mansion tax and therefore does not set out how wide the 10p band could become.Miliband did not set out the rate of the mansion tax and therefore does not set out how wide the 10p band could become.
David Cameron, surprised by the boldness of the move, said he was not worried and claimed the Labour leadership had dreamt up the policy overnight.David Cameron, surprised by the boldness of the move, said he was not worried and claimed the Labour leadership had dreamt up the policy overnight.
In reality the policy was kept under wraps by the leadership, although there were clues in his Guardian interview on Thursday morning.In reality the policy was kept under wraps by the leadership, although there were clues in his Guardian interview on Thursday morning.
The abolition of the 10p rate was one of the most disastrous decisions of Gordon Brown's government, contributing to a Labour defeat in the Crewe byelection in June 2008. It took almost £3.5bn to be corrected by Brown's successor at the Treasury, Alistair Darling.The abolition of the 10p rate was one of the most disastrous decisions of Gordon Brown's government, contributing to a Labour defeat in the Crewe byelection in June 2008. It took almost £3.5bn to be corrected by Brown's successor at the Treasury, Alistair Darling.
Writing in the London Evening Standard, Ed Balls, the shadow chancellor, goes into further details of the extent of the commitment.Writing in the London Evening Standard, Ed Balls, the shadow chancellor, goes into further details of the extent of the commitment.
He writes: "Governments make mistakes. But when they do it is always better to own up and put them right. The last Labour government did many good things. But we got things wrong too. Scrapping the 10p tax rate, which Labour first introduced in 1999, was one of those mistakes. People understandably thought Labour was no longer on the side of the hard-working people we have always sought to help.He writes: "Governments make mistakes. But when they do it is always better to own up and put them right. The last Labour government did many good things. But we got things wrong too. Scrapping the 10p tax rate, which Labour first introduced in 1999, was one of those mistakes. People understandably thought Labour was no longer on the side of the hard-working people we have always sought to help.
"Today Ed Miliband and I are saying that a 10p starting rate of tax should be brought back. It would put right a mistake made six years ago by the last Labour government. At a time when the economy is flatlining and the cost of living is rising it would boost the economy and put money back into people's pockets. And it would make work pay by ensuring people keep more of their income if they increase their hours."Today Ed Miliband and I are saying that a 10p starting rate of tax should be brought back. It would put right a mistake made six years ago by the last Labour government. At a time when the economy is flatlining and the cost of living is rising it would boost the economy and put money back into people's pockets. And it would make work pay by ensuring people keep more of their income if they increase their hours.
"We want to introduce a 10p rate in government to benefit everyone currently paying the basic rate of tax, and pay for it by taxing houses worth over £2m. That would mean a tax cut for 25 million people across Britain, including more than 6 million here in London and the south-east. It would send a clear message about how Britain is going to succeed in the years ahead: that when you play your part, when you make your contribution to the economy, you will be rewarded."We want to introduce a 10p rate in government to benefit everyone currently paying the basic rate of tax, and pay for it by taxing houses worth over £2m. That would mean a tax cut for 25 million people across Britain, including more than 6 million here in London and the south-east. It would send a clear message about how Britain is going to succeed in the years ahead: that when you play your part, when you make your contribution to the economy, you will be rewarded.
"Of course we've always said that our tax and spending commitments for the next parliament will have to wait until we publish our manifesto in 2015."Of course we've always said that our tax and spending commitments for the next parliament will have to wait until we publish our manifesto in 2015.
"That is the right and responsible thing to do because we don't know what the state of the economy and public finances will be in two years' time. Because George Osborne did not do that, he was forced this week to abandon his 2007 pledge to cut inheritance tax for estates worth less than £1m. We are not going to make promises we can't keep.""That is the right and responsible thing to do because we don't know what the state of the economy and public finances will be in two years' time. Because George Osborne did not do that, he was forced this week to abandon his 2007 pledge to cut inheritance tax for estates worth less than £1m. We are not going to make promises we can't keep."
Balls said he had been offering to hold talks with the Liberal Democrats on the mansion tax for over a year. Balls said there were 70,000 homes worth over £2m, adding nearly half were not main residences or second residences. He said many would not be occupied and were seen as investments.Balls said he had been offering to hold talks with the Liberal Democrats on the mansion tax for over a year. Balls said there were 70,000 homes worth over £2m, adding nearly half were not main residences or second residences. He said many would not be occupied and were seen as investments.
He said a mansion tax aimed at houses over £2m could raise between £1.7bn to £2bn. He added the policy would have to be structured so that low income pensioners were not penalised, adding: "The structure of the tax is important".He said a mansion tax aimed at houses over £2m could raise between £1.7bn to £2bn. He added the policy would have to be structured so that low income pensioners were not penalised, adding: "The structure of the tax is important".
Balls claimed that at one point Osborne had been interested in a mansion tax, but rejected the policy, and indeed used his rejection as a way of trying to raise cash from party donors. Balls said he was willing to meet with the Liberal Democrat chief secretary, Danny Alexander, to work on the details.Balls claimed that at one point Osborne had been interested in a mansion tax, but rejected the policy, and indeed used his rejection as a way of trying to raise cash from party donors. Balls said he was willing to meet with the Liberal Democrat chief secretary, Danny Alexander, to work on the details.
The announcement was praised by the Unison general secretary, Dave Prentis, who said: "Milband is beginning to tell people what they can expect from him and the next Labour government. I am sure that this kind of policy will chime with people who have been aghast at this Tory-led coalition's tax handouts to millionaires and tax credit cuts to millions. These tax plans would form a welcome step towards the fairer society that we all want to see".The announcement was praised by the Unison general secretary, Dave Prentis, who said: "Milband is beginning to tell people what they can expect from him and the next Labour government. I am sure that this kind of policy will chime with people who have been aghast at this Tory-led coalition's tax handouts to millionaires and tax credit cuts to millions. These tax plans would form a welcome step towards the fairer society that we all want to see".
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