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12.01.15

Most MPs prefer council tax reform to Labour's mansion tax

More than two-thirds of MPs believe higher council tax bands are a better way to reform property rates than a mansion tax.

A poll of 150 MPs by ComRes, commissioned by the British Property Federation (BPF), revealed that 69% of MPs believe additional higher-rate council tax bands would be a better way to reform annual property taxes on high-value homes than introducing a mansion tax. 

It also showed that 39% of Labour MPs favour additional higher-rate council tax bands over a mansion tax, despite the policy being one of Ed Miliband’s flagship proposals.

The policy has caused division in some elements of the Labour party and several prominent members have spoken out against the proposals. These include former cabinet minister Tessa Jowell; Margaret Hodge, chair of the public accounts committee (PAC), and former home secretary Charles Clarke.

New Scottish Labour leader Jim Murphy recently stoked the fire by pledging some of the money raised, which would overwhelmingly come from London, to be used to employ an extra 1,000 nurses in Scotland.

Support for council tax changes surges among Lib Dems and Conservatives, with 90% of the former and 92% of latter MPs also preferring additional council tax bands to a mansion tax.

The Lib Dems, who have pledged to increase tax on higher-value homes, said last April this would take the form of extra council tax bands.

Ian Fletcher, director of policy at the BPF, said: “This poll shows that a full council tax revaluation rightly commands widespread political support, particularly across the Labour party, and that the majority of MPs recognise that basing council tax on 1991 house prices is simply unsustainable. 

“The mansion tax is a political gimmick that is more about the narrative of rich vs the rest than anything else. Reforming council tax through a revaluation and raising revenue through adding more council tax bands would restore fairness to the council tax system and be better for the country as a whole. 

“It is particularly striking to see the level of support from MPs for reform across the Labour and Liberal Democrat parties, and that a number prefer it to a mansion tax. From the results of this poll the mandate for a mansion tax is very weak, even amongst those parties that have pushed it, and the right course of action would be to reform council tax.”

When asked separately whether there should be a re-evaluation of homes for council tax, excluding any argument over a mansion tax, support was overwhelming across the parties, with 75% of MPs in favour the policy.

Responding to the poll, local government minister Kris Hopkins said the government had no plans to introduce higher council tax bands or new taxes on family homes.

“Instead of finding new ways to tax people, I have been working with councils to keep bills down for families,” he said.

“Under the last administration council tax bills more than doubled, however, thanks to our council tax freeze which is entering a fifth year we have saved households £1,075 on the average Band D bill. Once again there is money on the table to help councils freeze bills to give families greater financial security and I would urge them to take it.”

He added that the British Property Federation needed to declare their financial interests. “They represent the property surveyors who would cash in from a council tax revaluation. The public have no appetite for higher taxes on family homes.”

Shadow chancellor Ed Balls recently said that imposing a mansion tax on homes worth more than £2m would be one of the first acts of an incoming Labour government next May.

(Image source: Joe Giddens)

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