Ed Balls speaks at the CBI conference in London last year. Photograph: Getty Images.
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Balls promises protection for those who can't afford mansion tax

Shadow chancellor seeks to reassure the asset rich but cash poor.

Labour threw its weight behind the idea of a mansion tax last year, promising to use the revenue it would generate to reinstate a 10p rate of income tax. In an article for today's Evening Standard, Ed Balls has offered the most detailed outline yet of how the policy would operate.

First, he confirms that it would only apply to property values over £2m, with the threshold raised annually in line with average increases in house prices, rather than general inflation. This, Balls writes, would "ensure that more modest properties are not brought into the scope of the tax".

Second, he promises that there will be "protections in place" for those who are asset rich but cash poor (an issue of particular concern to Londoners). This would take the form of a relief scheme, or allowing those on low incomes to defer payment until the property is sold.

Third, Balls announces that Labour has abandoned the original idea of a 1 per cent charge on property values over £2m in favour of a banded system — £2-£5m, £5-10m, £10-20m and over £20m — that eliminates the need for detailed annual valuations and ensures the very wealthiest pay more. This brings Labour into line with the new position recently outlined by Danny Alexander, who pledged to implement the policy through the existing council tax system. The aim, a Balls spokesman told me, is to reassure people to that the tax would be introduced in "a fair and proportionate way".

With both the Lib Dems and Labour unambiguously committed to the policy, the Tories are left as the only party that believes 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 George 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 the 2012 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”.

In the early months of the coalition, Labour MPs frequently complained of the "two-against-one" dynamic that allowed the Conservatives and the Lib Dems to trash the party's economic credibility, but on a mansion tax, and many other issues, it is now the Tories who are the odd ones out.

George Eaton is political editor of the New Statesman.

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Emily Thornberry heckled by Labour MPs as tensions over Trident erupt

Shadow defence secretary's performance at PLP meeting described as "risible" and "cringeworthy". 

"There's no point trying to shout me down" shadow defence secretary Emily Thornberry declared midway through tonight's Parliamentary Labour Party meeting. Even by recent standards, the 70-minute gathering was remarkably fractious (with PLP chair John Cryer at one point threatening to halt it). Addressing MPs and peers for the first time since replacing Maria Eagle, Thornberry's performance did nothing to reassure Trident supporters. 

The Islington South MP, who voted against renewal in 2007, said that the defence review would be "wide-ranging" and did not take a position on the nuclear question (though she emphasised it was right to "question" renewal). She vowed to listen to colleagues as well as taking "expert advice" and promised to soon visit the Barrow construction site. But MPs' anger was remorseless. Former shadow defence minister Kevan Jones was one of the first to emerge from Committee Room 14. "Waffly and incoherent, cringeworthy" was his verdict. Another Labour MP told me: "Risible. Appalling. She compared Trident to patrolling the skies with spitfires ... It was embarrassing." A party source said afterwards that Thornberry's "spitfire" remark was merely an observation on changing technology. 

"She was talking originally in that whole section about drones. She'd been talking to some people about drones and it was apparent that it was absolutely possible, with improving technology, that large submarines could easily be tracked, detected and attacked by drones. She said it is a question of keeping your eye on new technology ... We don't have the spitfires of the 21st century but we do have some quite old planes, Tornadoes, but they've been updated with modern technology and modern weaponry." 

Former first sea lord and security minister Alan West complained, however, that she had failed to understand how nuclear submarines worked. "Physics, basic physics!" he cried as he left. Asked how the meeting went, Neil Kinnock, who as leader reversed Labour's unilateralist position in 1989, simply let out a belly laugh. Thornberry herself stoically insisted that it went "alright". But a shadow minister told me: "Emily just evidently hadn't put in the work required to be able to credibly address the PLP - totally humiliated. Not by the noise of the hecklers but by the silence of any defenders, no one speaking up for her." 

Labour has long awaited the Europe split currently unfolding among the Tories. But its divide on Trident is far worse. The majority of its MPs are opposed to unilateral disarmament and just seven of the shadow cabinet's 31 members share Jeremy Corbyn's position. While Labour MPs will be given a free vote when the Commons votes on Trident renewal later this year (a fait accompli), the real battle is to determine the party's manifesto stance. 

Thornberry will tomorrow address the shadow cabinet and, for the first time this year, Corbyn will attend the next PLP meeting on 22 February. Both will have to contend with a divide which appears unbridgeable. 

George Eaton is political editor of the New Statesman.