Ed Balls and Ed Miliband on stage at the Labour conference in Manchester. Photograph: Getty Images.
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Balls refuses to deny plan to use mansion tax to "save NHS"

Ed Miliband is expected to announce the policy in his conference speech tomorrow. 

Ahead of Ed Miliband's speech tomorrow, the BBC's Nick Robinson is reporting that he will pledge to use Labour's proposed mansion tax on properties worth more than £2m to increase NHS spending. Labour sources have described this as "speculation", which isn't a denial, and at a fringe event this evening, Ed Balls refused to reject the story. He told NS columnist and Huffington Post political director Mehdi Hasan that "all the things I wanted to announce in my speech today I did" (leaving the path clear for Miliband) and did not commit to using the revenue it would raise for deficit reduction. 

Labour originally pledged to use a mansion tax to fund the reintroduction of the 10p tax rate, but in his speech today, Balls confirmed that this would now be achieved through the abolition of the Married Couple's Tax Allowance introduced by the coalition. On a mansion tax, he said: 

And we will levy a tax on the highest value properties - a mansion tax on houses worth over £2 million.

But we will do it in a fair, sensible and proportionate way. Raising the limit each year in line with average rises in house prices. Putting in place protections for those who are asset rich but cash poor. And ensuring those with properties worth tens of millions of pounds make a significantly bigger contribution than those in houses just above the limit.

Because how can it be right that the billionaire overseas buyer this year of a £140 million penthouse in Westminster will pay just £26 a week in property tax — the same as the average-value property in that area?

On the NHS, he said: "Conference, we saved our National Health Service from the Tories.

"And next year, after just five years of David Cameron – with waiting times rising, fewer nurses and a crisis in A&E - we will have to save the NHS from the Tories once again. And we will do what it takes." 

Using the revenue that a mansion tax and a super-mansion tax (on properties worth tens of millions) would raise gets Labour round the problem of how to increase NHS spending without a rise in general taxation, which the party regards as unfeasible at a time of falling living standards. 

It would also be a politically potent act of redistribution, with a populist (and popular) tax on the wealthy used to safeguard Britain's most cherished public institution. David Cameron vetoed the introduction of a mansion tax by the coalition on the grounds that "our donors would never put up with it". Expect Miliband to make much of how the PM "stands up for the wrong people" when he speaks tomorrow. 

George Eaton is political editor of the New Statesman.

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Scotland's huge deficit is an obstacle to independence

The country's borrowing level (9.5 per cent) is now double that of the UK. 

Ever since Brexit, and indeed before it, the possibility of a second Scottish independence referendum has loomed. But today's public spending figures are one reason why the SNP will proceed with caution. They show that Scotland's deficit has risen to £14.8bn (9.5 per cent of GDP) even when a geographic share of North Sea revenue is included. That is more than double the UK's borrowing level, which last year fell from 5 per cent of GDP to 4 per cent. 

The "oil bonus" that nationalists once boasted of has become almost non-existent. North Sea revenue last year fell from £1.8bn to a mere £60m. Total public sector revenue was £400 per person lower than for the UK, while expenditure was £1,200 higher.  

Nicola Sturgeon pre-empted the figures by warning of the cost to the Scottish economy of Brexit (which her government estimated at between £1.7bn and £11.2.bn a year by 2030). But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose considerable austerity. 

Nor would EU membership provide a panacea. Scotland would likely be forced to wait years to join owing to the scepticism of Spain and others facing their own secessionist movements. At present, two-thirds of the country's exports go to the UK, compared to just 15 per cent to other EU states.

The SNP will only demand a second referendum when it is convinced it can win. At present, that is far from certain. Though support for independence rose following the Brexit vote, a recent YouGov survey last month gave the No side a four-point lead (45-40). Until the nationalists enjoy sustained poll leads (as they have never done before), the SNP will avoid rejoining battle. Today's figures are a considerable obstacle to doing so. 

George Eaton is political editor of the New Statesman.