Miliband: Tax cut for millions paid for by homes of super-rich

- London's super-wealthy would foot bill for tax cut to 25 million people
Ed Miliband
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Ed Miliband today offered a £100-a-year tax cut to 25 million people - paid for by a new tax on the homes of London’s super-wealthy.

In his boldest policy announcement yet, Labour’s leader proposed to restore the 10p tax band abolished by Gordon Brown in what he admitted was “a mistake”.

The giveaway would be paid for by a new Mansion Tax on homes worth over £2 million, 91 per cent of which are in London and the South East.

It amounts to a £2 billion raid on London’s elite, with the proceeds handed over to taxpayers on low and middle incomes.

Writing exclusively in tonight’s Evening Standard, shadow chancellor Ed Balls said six million basic rate taxpayers in London could gain £100 each, though details are not yet fixed.

Mr Miliband’s Robin Hood-style plan was laden with symbolism designed to frame the 2015 general election battle around the squeeze in living standards.

In a speech in Bradford, where Conservative prime minister Harold Macmillan made his famous “You’ve never had it so good” speech in 1957, Mr Miliband said millions fear they will “never have it so good again”.

“Petrol for the car. Tickets for the train. Childcare for the kids. Deposits for a first home. The “squeezed middle” has never been so squeezed,” he said.

Under Labour’s new plans, the 10p band would only apply to the first £1,000 of taxed income, less than half the £2,500 spread that the old rate applied to.

The Mansion Tax is a pet policy of top Liberal Democrat Vince Cable that has been flatly rejected by David Cameron. Embracing the idea of a left-leaning rival to Nick Clegg - and one who is in occasional text message contact with Mr Miliband - could fuel Coalition divisions, particularly if the Lib Dems lose in Eastleigh.

In the small print, however, it was made clear that it is currently a proposal rather than a cast-iron pledge. The go-ahead will have to wait for Labour’s manifesto in May 2015.

Mr Miliband said the twin measures sent “a clear signal about the priority we attach to a fairer tax system and the living standards of working people”.

He sought to exploit a sense of grievance among people “working harder than ever before” who felt worse off.

A Mansion Tax will hit Londoners almost exclusively. Research published last year said there are only 74,000 homes worth £2 million in the country, and 91 per cent were in London and the South East. Half of such properties are currently bought by foreigners.

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