Labour at war over mansion tax

Shadow Chancellor Ed Balls has been forced to defend Labour’s planned ‘mansion tax’

Abraham Lincoln once famously stated that ‘a house divided against itself cannot stand,’ an idiom which is only too appropriate when discussing the current split within the Labour Party over plans to introduce a so-called ‘mansion tax’ on houses worth over £2 million. The idea of such a tax is not new, nor is it an exclusively Labour proposal; indeed, it was the Liberal Democrats who first proposed the introduction of a mansion tax in 2010, but as with many of their policies it was soon shelved once Nick Clegg and Vince Cable were ensconced in their plush ministerial offices.

Not everyone in the Labour Party is happy to see the mansion tax resurrected, however, with several of the party’s London MPs speaking out against a move which will disproportionately affect residents of the capital, where house prices are notoriously high. Two such figures have been Tessa Jowell and Diane Abbott, both of whom represent relatively deprived London constituencies and are expected to seek the Labour nomination for London Mayor next year. Despite coming from very different factions of the party, Jowell and Abbott have been united in their opposition to the mansion tax, pointing out that it will hit ordinary people and not just those living in Downton Abbey style residences.

The Labour leadership has so far managed to quell the party’s internal conflict over the tax, but this week has brought further bad news as former cabinet minister Peter Mandelson has waded into the debate, with some harsh words for Ed Miliband and Shadow Chancellor Ed Balls. A prominent Blairite who famously declared himself to be ‘intensely relaxed about people getting filthy rich,’ Mandelson lashed out against the plans, stating that Labour will merely end up ‘clobbering people with a rather crude, short-term mansion tax.’

This intervention from Mandelson has forced Ed Balls to come out fighting in defence of his flagship policy, with the Shadow Chancellor today stating that the proposals will simply ensure that the wealthiest make a fair contribution towards the running of the NHS. However, once again Balls is wide off the mark, failing to recognise the increased pressure that the tax will place upon ordinary families living in modestly-sized flats and houses in up-and-coming areas of London. By ploughing on regardless, Miliband and Balls show total disregard and contempt for such people whilst resurrecting a deeply unpopular and discredited tax-and-spend approach to the economy.

If the mansion tax represents a hammer blow against residents of London, it is equally a victory for the people of Scotland, who stand to gain 1,000 new nurses as a result of Labour’s proposals, and it is therefore unsurprising that one of the tax’s biggest cheerleaders has been the new Scottish Labour leader Jim Murphy. Whilst the increase in nurses north of the border is much-needed, the means by which Labour propose to achieve this goal are far from desirable. By fleecing ordinary Londoners in order to provide for ordinary Scots, the Labour Party are playing a highly divisive political game whilst pandering to the anti-London rhetoric of groups such as the Scottish National Party.

Like many of Ed Miliband’s economic policies, the mansion tax is poorly thought-out and riddled with flaws and contradictions, hitting modest terraced homes in London whilst leaving sprawling country piles in northern England absolutely untouched. No matter what Ed Balls may say, it is nothing more than a shameless bit of populism, exposing the Labour Party’s deep-seated desire to punish London and the South East. One can only hope that the internal conflict it has created will be enough to signal the tax’s demise, and indeed the demise of Labour’s election hopes.

George Reeves

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