David Miliband adopts Lib Dem mansion tax policy

by Stephen Tall on August 3, 2010

The Guardian reports today:

Owners of homes worth more than £2m should pay an annual “mansion tax” to help the poor, Labour leadership contender David Miliband said today. The shadow foreign secretary said the levy would raise £1.7bn to restore housing benefit for the least well-off.

The proposal – outlined in an interview with the Evening Standard – appears designed to drive a wedge between the coalition partners, as well as appealing to Labour grassroots.

Business secretary, Vince Cable, put the idea in the Liberal Democrat general election manifesto – but it was lost during negotiations with the Tories. Under the plan, owners would have to pay a 1% levy on a property’s value above £2m.

Actually Mr Miliband has many times said he supports the mansion tax, including in The Guardian six weeks ago: “We should not be afraid of a mansion tax on £2m houses”. His support is at variance with Labour’s response at the time, with Exchequer Secretary to the Treasury Sarah McCarthy-Fry denouncing the proposal as a “muddle [that] is typical of the Lib Dems”.

The mansion tax of course remains Lib Dem policy – a fact missed today by the Daily Mail which inaccurately suggests “it was dropped before the election following an internal party revolt.” Erm, not exactly. Good old Daily Fail.

The attraction of the idea for Mr Miliband is clear. It not only positions him slightly to the centre-left at a time when his brother, Ed, is actively courting the second preferences of Ed Balls and Diane Abbott, also both seen as candidates of the left (somewhat ludicrously in Mr Balls’ case). But it also seeks to drive a wedge between the Lib Dems and the Conservatives, who demanded the policy be dropped during the coalition negotiations.

In the longer-term, of course, Mr Miliband’s strategy is clear enough: to occupy the progressive centre of British politics, with the simultaneous aim of weakening the Coalition partnership in Parliament and appealing to disaffected Lib Dem voters in the country.

The strategy is easy to identify. The question for Lib Dems is how we deal with it.