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Mansion tax plan could help Devon and Cornwall

By Western Morning News  |  Posted: February 15, 2013

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Labour leader Ed Miliband has promised a "mansion tax" on £2 million homes to fund the return of the 10p rate of income tax to help low-income families.

The pledge, Labour's first major economic policy commitment, would, in effect, hit rich Londoners, wealthy second home owners and country estates. Low-income Devon and Cornwall would in theory benefit disproportionately.

The surprise announcement was designed to outflank the Conservatives, borrow the Liberal Democrats' listing "mansion tax" plan and distance Mr Miliband from Gordon Brown, who scrapped the lower 10p-in-the-£1 starting rate of tax in 2008.

Mr Miliband said 25 million basic rate taxpayers would benefit, and the plan would see Labour "moving on from the past".

The Labour leader said it was a "mistake" for his predecessor to axe the 10p rate.

The Conservatives said the policy acknowledged Labour's "incompetence" in government. Lib Dems said by the Coalition raising the income tax threshold people were now £600 a year better off.

But Lib Dem Business Secretary Vince Cable – who has long championed the idea of a "mansion tax" – welcomed "Labour's change of heart".

Mr Miliband said the policy demonstrated Labour's "priority to do everything we can to make a difference to people's living standards" – the message he will fight the 2015 general election on.

In principle, the 10p tax rate – lower than the current 20p level – for people on £10,000 to £11,000 should benefit the region.

Average pay in the UK is £26,664 a year – but is much lower in Somerset, where it is £23,595, Devon £22,214, Plymouth £21,978, Cornwall £20,952 and Torbay £19,509.

The 2,300 properties in the South West estimated to be worth more than £2 million – 3.1% of all in that bracket – are very largely second homes in hotspots such as Rock in North Cornwall, and Salcombe in South Devon.

Some Westcountry Lib Dems have been cautious about the policy if it led to the threshold being reduced to £1 million or lower – hitting households on modest incomes or state pensions who are "property rich but cash poor".

Ben Bradshaw, Labour MP for Exeter, said: "This will be great for the Westcountry where we have a lot of people on low incomes who will benefit from a 10p rate and very few properties worth £2 million or more.

"I'm really pleased Ed Miliband will reverse one of Gordon Brown's worst mistakes and has listened to those of us who have been arguing for many years that we need to shift taxation from work to wealth."

The Coalition yesterday championed its rise in the personal allowance – the point at which income tax kicks in – to £9,440, taking two million workers out of paying tax altogether – including all those hit by the 10p abolition.

Mel Stride, Tory MP for Central Devon, said: "Labour have a lot more they need to tell us than just this announcement – like how they will continue to bring down the deficit while presumably reversing the large number of expenditure cuts they have voted against in Parliament.

"Lowering taxes on the less well-off is a good aspiration and we have already taken millions of the low-paid out of tax altogether under this government but a 'mansion tax' is not the right way to go – it will discourage many who have worked hard to get on."

Stephen Gilbert, Liberal Democrat MP for St Austell and Newquay, said: "The Labour party have nothing original to say on the economy or tax reform.

"It's the Liberal Democrats in this government who are delivering a stronger economy in a fairer society and 22 million people are no longer paying tax on that portion of their earnings at all."

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12 comments

  • DogsDanglies  |  February 15 2013, 4:32PM

    I see that those of a more 'left of centre' disposition have been hitting the down-vote button .... So predictable. DD

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  • 2TheBeehive  |  February 15 2013, 4:18PM

    @nickthompson.......very predictable. I now await for public sector workers to come and air their views, as they will be home soon.

    Rate   -11
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  • nickthompson  |  February 15 2013, 3:49PM

    2TheBeehive Friday, February 15 2013, 11:15AM . "What George Galloway on the lefty BBC1 station" ------I didn't think so,1xTory Minister--1x Lib dem(lord)-- 1xLabour shadow minister (more Tory than the Tory)-- 1x Editor of a right wing newspaper--1xleft wing Galloway,who during the programme spoke more common sense ( and expressed the thoughts of the average man in the street) more than the other three put together.

    Rate   18
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  • twofeetofsnow  |  February 15 2013, 1:31PM

    Ed Miliband... Promises everything knowing he'll never have to deliver.

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  • 2TheBeehive  |  February 15 2013, 11:55AM

    Ha!ha!ha!ha!.....you can always rely on the reds being in evidence when they think they are being hard done by.......ha!ha!ha!........what a joke they all are.......ha!ha!ha!.

    Rate   -13
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  • Dantwo  |  February 15 2013, 11:46AM

    The time has clearly come to consider voting Labour. Forget about Tony and Gordon, this is New NuLabour. Or would be if it wasn't for all the old faces hanging around, no doubt hoping to get their snouts into the trough again. Harman, Balls... the list is endless. Er, maybe not. No, it's another Tory/Libdem coalition for me. Think of all the good they've done to date, the er, er, wind turbine industry has never done better. Think of the free clean green energy we've got from the ConDems. Vote UKIP and end this musical chair politics.

    Rate   -25
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  • GordonHook  |  February 15 2013, 11:24AM

    13 years in Government and their first economic statement in opposition is to attempt to undo the damage of their time in Government. Doesn't inspire confidence in that bunch of economic illiterates does it? The best way to cut taxes for those on low incomes is to take them out of tax altogether, which is why Lib Dems in Government are raising the Personal Allowance. From April, almost 25 million will be getting a further Income Tax cut so they will be significantly better off than under Labour. Labour were in power for 13 years til recently. We saw the gap between rich and poor grow to its biggest ever, we saw bankers allowed free reign,taking us for every penny they could get, they (Labour) spent all the money and took us into an illegal war...and yet some people will still vote for them! With the Lib Dems in Government the wealthy are paying more in each year of this Parliament compared to any under Labour. 13 wasted years or what!!!

    Rate   18
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  • 2TheBeehive  |  February 15 2013, 11:15AM

    What George Galloway on the lefty BBC1 station. Um I don't think there is much to be said there, do you. I am sure the Tory party will be shaking in their boots. In fact if Po, Tinky, Winky or LaLa told the Tory party that they were running for government , the Tories at this present time would probably be shaking in their boots. Neither the Labour party or the Libs or Cons are very believable with the "brilliant policies" hic they are trying to convince us are going to change the country and its economy.

    Rate   -17
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  • DownUnderDave  |  February 15 2013, 11:03AM

    Socialist Labour never learn. You can't make the poor rich, by making the rich poor. Successive regimes world wide have tried it umpteen times, and many still believe it works. It doesn't. You cannot "equal everybody", to a financcial level, because the outcome is predictable and certain. Just look across the Channel. The wealthy create employment, take the risks with investments, build infrastructure, and pay huge taxes to the Govt.of the day. Ever higher taxes on the better off, usually results in them taking their money elsewhere. Who wouldn't? Why would you continue to fund welfare...there is a limit to how much of the cake you can take. Sooner or later....there's none left. David Griffiths Lithgow. NSW Australia

    Rate   -16
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  • nickthompson  |  February 15 2013, 10:46AM

    Having listened to George Galloway on BBC Question time last evening,I now appreciate why the right wing press detest and fear this man.

    Rate   4
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