Miliband's mansion tax will do nothing to solve the housing crisis

Relatively modest homes in central London are now worth millions.
Relatively modest homes in central London are now worth millions.
Adam Bienkov By

Ed Miliband's mansion tax is bad policy and bad politics. It will entrench social divides, destroy mixed communities and do nothing to solve the growing housing crisis in London and the south east.

Few voters will shed a tear over the imagined victims of Miliband's new tax.

Labour voters in particular will assume it exclusively affects a series of portly bankers and sinister Russian oligarchs.

But the reality is that the tax will also hit relatively ordinary people who just happen to have lived through a deep and growing housing crisis.


Retired pensioners who bought their homes for a tiny fraction of what they cost now, will be forced to sell up, only to be replaced by exactly the bankers and oligarchs the policy is supposed to attack.

Relatively mixed communities will become exclusively rich ghettos and all for the sake of just £1 billion of new tax revenues a year.

The housing crisis was not caused by homeowners in Chelsea. Two million pound town houses are not the cause of London's housing crisis, they are the symptom of it.

By raising a mansion tax, Miliband is attacking the symptom, while doing nothing to treat the disease.

Londoners did not cause the housing crisis, they are the victims of it. Over the last ten years, house prices in central London boroughs have more than doubled with some areas rising at far greater rates.

The failure by successive governments to build new homes has grossly distorted property prices and caused a crisis that has hit both poor and middle class households alike.

It is a huge political scandal for which the entire political class should be blamed.

The real solutions to this problem are costly and politically difficult, which is exactly why Ed Miliband is not attempting any of them.

If Miliband was a brave politician, as he claimed to be today, he would have announced that Labour planned to revalue all UK council tax bands.

He would also have committed to placing capital gains tax on all future house sales.

These would be progressive solutions that demonstrated exactly the kind of "politics of together" that he spent over an hour talking about today.

Instead Miliband has gone for the easy option of targeting just a few people living in just a few boroughs in just one city.

The mansion tax is not even a sticking plaster. It is a torn piece of toilet paper placed on an open wound.

London's growing housing crisis is a real problem which requires real imagination and real bravery. Today Miliband demonstrated neither.

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