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Lord Mandelson brands Labour mansion tax ‘crude’

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Written by: Hannah Uttley
20/01/2015
Labour peer Lord Mandelson has criticised one of his party’s key proposals, instead favouring Liberal Democrat plans to adopt higher-rate council tax bands over a mansion tax.

In an interview on BBC’s Newsnight the ex-cabinet minister said while the council band revaluation would take longer to introduce, it would be more effective in the long term than “clobbering” home-owners with a mansion tax.

He said: “We don’t have an efficient system of taxing property in Britain, I don’t happen to think the mansion tax is the right response to that, I think it’s crude, it’s short-termist. I think what we need is what the Liberal Democrats are proposing which is the introduction of further bands that relate to different values of property within the council tax system and that’s what I would like to see.

“It would take longer to introduce, that’s true but it would be effective and efficient in the longer term than simply clobbering people with a rather sort of crude, short-term mansion tax.”

Labour has proposed to place a mansion tax on homes worth £2m or more and it has been estimated the scheme will raise around £1.5bn.

According to a poll carried out by the British Property Federation, the majority of MPs believed adding higher-rate council tax bands was a better way to reform property taxation than a mansion tax. Two-fifths of Labour MPs were in favour of additional council tax bands over a mansion tax.

When asked what message he believed the mansion tax proposals were sending out to the public, Mandelson said: “I don’t think it’s sending a message; I want policy effectiveness, I want efficiency. I think people are entitled to expect thought through, sophisticated responses to serious problems.”

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