The proposed tax is unfair on those who may be asset-rich – the elderly widow springs to mind – but whose income is low. If Labour were to pursue the policy announced last week, and set the threshold at £2 million, the result would be bizarre – from discontinued improvements to deliberate vandalism: anything to help the home owner limbo dance under the danger area. It is peculiar to try to raise money for the state by taxing this one particular form of wealth, and in this one particular way.
What about someone who owns several houses, all of them worth £1.9 million: why should he or she pay nothing, while someone who owns just one pricey home gets totally clobbered? What about someone who lives in a home worth a million, but happens to have a load of Van Goghs and Cézannes on his kitchen wall, or gold bars under his bed? Why should he get away with paying nothing, while the taxman pulverises the little old lady still living in the former family home next door?
The pressure to be fairer between households, and to reduce the sudden severity of the tax, would be very great. If Ed and Ed came to office – a very big if – they would almost certainly modify the mansion tax, so that it was less of a blatant disincentive to doing up a home. They might have several bands for the new tax – hundreds of bands, thousand of bands (or Milibands, as they will be known).
They might decide to solve the elderly widow problem by going with the even more demented Liberal Democrat proposal, and taxing fixed wealth of all kinds. So we would have a new race of ghastly beady-eyed officials tasked with feeling under our beds for gold bars and running an expert eye over the pictures on the wall, or rifling through the jewellery box. An Englishman’s home, to put it mildly, would no longer be his castle.
Every property owner in the country would be engaged in an undignified haggle with the authorities to persuade them that their home was under this or that threshold. The end result would be in many cases to force sales, and to reduce the value of property – and for a country whose wealth is, for better or worse, so tightly tied to property, that would not be a good outcome.
Yes, of course we need people to be able to afford to live in Britain. But the answer is not to make it even more punishing to own a home in an expensive part of the country. The answer is to get going with a massive programme of house-building on the many brownfield sites. Here in London we have a crying need for homes — hundreds of thousands of them over the next 10 years.
We could build about 80 per cent of them on the 18 brownfield opportunity areas that have already been identified across the city, and all we need is a steady stream of funding to be able to get on with it. That could be found by simply earmarking, for London, the £1.3 billion that the London residential market already raises in stamp duty. And with one in four small and medium businesses in construction, that programme would get huge numbers of people into work.
If you listen to Nick Boles, the housing minister, you can see that he understands the urgency of the problem. The Treasury understand it, and George Osborne knows that Tories win elections when they help aspirant people get the homes they need – and it is time to return to the great Tory building programmes of the Fifties, but with beautiful standards and on brownfield sites.
As for Labour, they have shown their true colours. The Blairites in the party must be watching with incredulity and despair. Never mind the individual injustices – the message of the Miliband policy is that Labour is once again hostile to one of the deepest instincts of the British people: to show the energy, enterprise and ambition to want to improve your own home and to raise its value. I cannot believe Miliband will pursue this policy through to the election. If he does, he will have signed his political death warrant.
