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18 August 2011

Can the right be persuaded to back a “mansion tax“?

ConservativeHome editor Tim Montgomerie says the right should support higher property taxes.

By George Eaton

Tim Montgomerie has a typically thoughtful piece in today’s Guardian on social justice and the coalition. The ConservativeHome editor points out that the right has accepted significant parts of the Blair-Brown settlement – a ring-fenced NHS (at least in theory), higher international development spending, the minimum wage, a panoply of pensioner benefits – and asks if the left can make similar concessions. He writes: “[C]an the left acknowledge the harm caused by family breakdown? Can Labour politicians get to the point where they agree that single parenthood is sometimes wonderful, often unavoidable but rarely ideal?”

As luck would have it, this week’s New Statesman is on that very subject. We asked ten left-wing politicians and thinkers, including Spirit Level authors Kate Pickett and Richard Wilkinson, Marc Stears, Diane Abbott, David Lammy and Melissa Benn, to address the issue of family breakdown and you can read their responses in the new issue (out today in London and in the rest of the country tomorrow).

Blue Labour thinker Marc Stears, for instance, writes:

For far too long, many of us on the British left have spoken to the country like washed-out tutors of Marxist social science. All questions of family breakdown, domestic abuse and personal ethics have been rendered as issues of material distribution. Problems have been presented as the all but inevitable outcomes of inequalities in income, wealth or opportunity and their solutions said to lie almost exclusively with the redistributive power of the state … The call to re-engage with the family presents the perfect moment for us to put this oversight right.

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In his Guardian article, Montgomerie argues that we must rebalance the welfare state in a pro-family direction. As this week’s NS leader noted, a remarkable number of the coalition’s benefit cuts – from the abolition of baby bonds and the Health in Pregnancy Grant to the three-year freeze in child benefit – hit families hardest. In addition, as I revealed last month, Cameron has broken his promise to protect Sure Start, a lifeline for low income families, and 20 centres have already been closed. By contrast, benefits for the elderly – free TV licences, free bus passes, the winter fuel allowance [WFA] – have been ring-fenced for entirely political reasons (the elderly vote more than any other age group). Montgomerie proposes means-testing the WFA (80 per cent of recipients are not in fuel poverty) and investing savings of £2.2bn in early intervention programmes. It’s a stance that Labour’s boldest thinkers, most notably James Purnell, will be sympathetic to.

But Montgomerie also wants the right to make some more concessions of its own. He calls for greater taxation of wealth, including high-value properties, and supports a version of Vince Cable’s “mansion tax”. Britain, he writes, has taxed income too heavily and wealth too lightly.

It’s a subject that the New Statesman has devoted considerable attention to over the past year. In a cover story published in October 2010 (“The coming battle over land and property”) NS editor Jason Cowley argued for a new model of taxation that shifts the burden of taxation from earned to unearned income; from taxes on income and consumption to those on property, inheritance and land.

In our leaders, we have long argued that there are strong, principled and pragmatic arguments for higher taxes on property. As a recent editorial noted:

These automatically apply to largely untaxed foreign owners, target the source of much unearned wealth and are harder to avoid than taxes on income. In addition, they reduce the distorting effect that property speculation has on the economy.

As the coalition’s internal debate on taxation continues (the Lib Dems want the 50p rate to be replaced with a range of new property taxes), it’s encouraging to see one of the right’s brightest thinkers take up this agenda.

 

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