The shadow cabinet may have been kept in the dark but Ed Miliband did have a policy to announce on Thursday; and it was a big one which made the front of today’s FT.
With one stroke he has seized the political initiative, at least temporarily. The politics and fiscal implications are both worth examining in detail.
Clearly the promise of a new mansion tax is an attempt to steal the Lib Dems’ big idea and neutralise any lingering attraction between the third party and left-leaning voters. Labour is still vague about how the tax would work, however: it could still consist of a new upper rate of council tax on the most pricey homes. (Ed Miliband’s is said to be worth about £1.9m, incidentally).
Meanwhile by promising to reinstate the 10p tax band – albeit only in a limited way – Labour hopes to close down any attempt by the Tories to make a similar move. The party also wants to end any lingering anger at the original scrapping of the rate by Gordon Brown.
It was in the spring of 2008 that the changes kicked in as a way to make up for Read more