UK Politics

Kinnock: Mansion tax levy 'only cost of a lunch'

Lord Kinnock Image copyright Getty Images
Image caption Mr Kinnock is an enthusiastic supporter of Labour leader Ed Miliband

Labour's proposed tax on expensive properties in the UK would cost the wealthy no more than a good lunch, former leader Neil Kinnock has said.

Shadow chancellor Ed Balls has previously said those owning homes worth £2m-£3m would pay £250 a month.

Some London Labour MPs have expressed concerns about the policy, warning it could cost them votes in the capital.

But Lord Kinnock defended the policy, telling the Financial Times the levy would make no difference to the rich.

The proposed "mansion tax" is one of Labour's main 2015 general election commitments.

The proceeds of the levy would be used to fund the recruitment of 38,000 new GPs, nurses, midwives and other NHS professionals.

'Clobbering people'

Labour says it is right to ask the rich to make a bigger contribution.

However, several potential Labour candidates for mayor of London in 2016 have expressed concerns that the steep rise in house prices in the capital would see family homes becoming liable for the tax.

Among them is Diane Abbott, who has called for the proceeds of the tax to be spent in the area where it is levied, in London's case on social housing.

Former Labour minister Peter Mandelson has attacked the policy as "crude" and "short-termist" and said he objected to the idea of "clobbering people".

But Lord Kinnock defended the proposal for a "mansion tax", saying it would not be a problem for the very wealthy.

"For the people who are asset-rich and very prosperous, a couple of hundred quid a month isn't going to make a difference. They would spend that on lunch," he told the Financial Times.

Image copyright PA
Image caption Some Labour MPs fear the policy will hit London home owners hardest

Mr Balls has said the tax would start at about £250 for owners of homes worth between £2m and £3m, while more expensive properties and second home owners would pay much higher rates of the "progressive" tax.

The tax threshold would rise in line with average prices for high-value properties, not inflation, according to the shadow chancellor.

Under the plans, people who are "asset-rich, cash poor" would be able to defer payment until "the property changes hands".

The Liberal Democrats were the original proposers of the idea of a mansion tax, prior to the 2010 general election.

However, the party has since refined its policy, saying it would overhaul council tax bands for the most expensive homes.

Both the Conservatives and UKIP oppose the idea of a "mansion tax", describing it as an attack on aspiration.

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