Following the Labour Party Conference, several senior figures in the Labour Party have spoken out to voice their fears over Labour’s unworkable and damaging Homes Tax.
It was confirmed by both Ed Miliband and Ed Balls at this year’s Labour Conference, that if they were elected following the General Election, either by themselves or as a part of a coalition with the Liberal Democrats, then they would introduce a new annual tax on properties worth over £2million, and probably less.
Although dubbed by Labour as a ‘Mansion Tax’, in London where house prices are well above the national average, the tax would affect ordinary family homes and even flats. Greg Hands, MP for Chelsea and Fulham, has consistently warned that the new levy is in reality a Homes Tax, and would not just hit the super-rich, but many people, including pensioners, who had lived in their homes for decades. If implemented, it would unfairly impact on capital-rich but income-poor homes, particularly people who bought their homes years ago at lower values who would see themselves dragged into the £2m bracket. This could especially include retired people.
Now, in the weeks following the party conferences, several senior Labour figures have raised similar concerns about the policy’s fairness, workability, and popularity:
Labour MP Karen Buck, Miliband's parliamentary private secretary, said she was "very, very anxious" about it, telling the Daily Telegraph that she would only support the levy if safeguards for vulnerable people are included in the plans.
Speaking to the Daily Mail, Margaret Hodge MP, chairman of the Commons public accounts committee said the policy was ‘too crude to work properly’.
And former Olympics minister Tessa Jowell, MP for Dulwich and West Norwood, said: ‘I am concerned about my typically older families who are asset rich and income poor. They bought houses 40 years ago, which have appreciated enormously in value and they certainly can’t afford a mansion tax.’
Lord Bragg, the Labour peer and broadcaster, told the Sun that Miliband's tax was "grotesquely unfair" and "may have wiped out Hampstead as a Labour seat".
Additionally, Labour's biggest individual donor John Mills, who gave the party £1.65 million lastyear, said implementing the plans would produce "all sorts of problems" and spoke up for an alternative measure. Mr Mills, chairman and founder of consumer goods giant JML, told the Telegraph correctly valuing houses would be "really tricky" and warned home owners with mortgages could be forced into "negative equity".
Commenting on the policy and the criticisms, Greg said: “I have long warned about the unfairness this new tax would bring. But don’t take my word for it, even Ed Miliband’s biggest supporters from inside his own party are against it. The revelations from within Labour’s own ranks, highlight just how damaging and unpopular this tax would be.
“There is a real danger that if Labour were to get in at the next general election, they would inflict this on homeowners in my constituency and across the country. In contrast, this Government is keeping council tax down for hardworking people, with bills cut by 11 per cent in real terms since 2010.”