Miliband’s mansion tax retoxifies the Tory brand – and portrays the Lib Dems as helpless hostages

The Tories' opposition to a mansion tax puts them on the wrong side of the new divide in British politics.

George Osborne knows better than most how tax pledges can wrong-foot a government. It was his promise at the 2007 Conservative conference to raise the inheritance-tax threshold to £1m, funded by an annual levy of £25,000 on non-domiciled taxpayers, that spooked Gordon Brown into calling off an early election and earned Osborne his reputation as his party’s sharpest political brain. Labour MPs still wince at the memory of the subsequent “magpie Budget” in which Alistair Darling, under orders from Brown, sought to mimic Osborne’s proposals.

Five and a half years later, it is the Tories who have been blindsided by Labour’s version of Osborne’s gambit. Like the shadow chancellor in 2007, Ed Miliband twinned a popular tax cut (a 10p rate of income tax) with a popular tax rise (a “mansion tax”) and positioned himself on the side of the middle classes. In the Labour camp, there is satisfaction at how the speech has succeeded in defining the pre-Budget terms of debate. It is a sign of Miliband’s enhanced stature that his proposals are now being discussed on the assumption that there is a good chance of them becoming law. The tax pledge has reassured those MPs previously troubled by the party’s lack of emblematic policies. As one frontbencher told me, “It passes the doorstep test.”

It was the Conservative MP Robert Halfon who originally proposed a reintroduced 10p tax rate as an artful piece of Tory detoxification. When I met him in his Commons office the day before Miliband’s speech, he lamented how Labour’s “brilliant” campaign against the abolition of the 50p tax rate had defined the Tories as “a party only interested in cutting taxes for millionaires”. Polling shows that just 9 per cent of the public believe the Conservatives best represent the interests of low-paid public-sector workers, while just 14 per cent believe they best represent their private-sector counterparts. By bringing back the 10p rate on income above the personal allowance and by funding it through the revenue generated by the 45p rate, Halfon argued that the Conservatives could prove that they believed in “tax cuts for the many, not just the few”.

The proposal won the support of key Osborne allies, including his former chief of staff Matthew Hancock, and was earmarked by the Treasury for inclusion in the 2014 Budget. Yet following Miliband’s deft act of political plagiarism, it is now off the table. Unlike Brown in 2007, Osborne has no intention of dancing to the opposition’s tune. Instead, he has sought to give the coalition’s policy of raising the personal allowance a harder edge by branding it as a “zero per cent tax rate”. This, he said, would be “more attractive at an election than a 10 per cent tax rate”. Rather than introducing a new tax band – a measure that would sit uneasily with his commitment to a simplified tax system – Osborne is more likely to seek to increase the personal allowance beyond the original target of £10,000.

A far greater problem than the loss of the 10p tax rate is the coalescing of Labour and the Liberal Democrats around a mansion tax. Of the three main parties, only the Tories now believe that a family in a three-bedroom house in Tower Hamlets should pay the same rate of property tax as an oligarch in a Kensington palace. Those voters who select what James O’Shaughnessy, David Cam­eron’s former director of policy, calls the “dreaded posh family in front of a mansion” when asked to choose the picture that best represents the Tories have had all their prejudices confirmed.

The irony is that it was Osborne – who is now leading the charge against a new property tax – who agreed to introduce two higher council tax bands on houses worth more than £1m ahead of last year’s Autumn Statement before being overruled by Cam­eron. It later emerged that the Tories had surreptitiously written to their wealthy donors soliciting funds to campaign against a “homes tax”, a fact that Miliband gleefully cites as proof that the Prime Minister “stands up for the wrong people”. The Labour leader intends to increase the Tories’ discomfort by using an opposition day debate to force a Commons vote on a mansion tax. In order to maximise the chances of support from Nick Clegg’s party, the motion is not expected to include a reference to the 10p tax rate.

As Miliband hoped, his appropriation of the measure has already forced the Lib Dems into even more aggressive differentiation. Clegg accuses his coalition partners of “turning a blind eye to the super-wealthy” and of defending the interests of “people in very large mansions”. For Labour, such interventions have a dual purpose; they retoxify the Conservative brand while reinforcing the impression of the Lib Dems as the helpless hostages of a Tory clique.

Ever since the Thatcher era, British politics has been governed by the belief that the left won the culture war and the right won the economic war. Yet increasingly it feels as if the reverse is now the case. The left is winning the debate on the need for greater financial regulation and taxation of the wealthy, while the right is winning the debate on the need for a new social conservatism to heal Britain’s “broken society”. In their opposition to a mansion tax, the Tories have positioned themselves on the wrong side of this divide. Until they do otherwise, that picture of the “dreaded posh family” will continue to define them.

Ed Miliband and Swedish Social Democratic leader Stefan Lofven talk after a visit at the Royal Institute of Technology in Stockholm, Sweden. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

This article first appeared in the 25 February 2013 issue of the New Statesman, The cheap food delusion

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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.