Boris Johnson is weighing up plans to impose a “mansion tax” on expensive homes and cut pension tax relief as part of an effort to fund a huge increase in public spending aimed at former Labour voters in the North and Midlands who voted Tory for the first time.
The Daily Telegraph reports the “shock” plans to raise more tax from better-off homeowners will “infuriate the Conservative Party’s grassroots and stun MPs”.
It is not clear exactly what form the tax would take if it were included in the 11 March Budget, “but options range from a levy – first mooted by Ed Miliband, the former Labour leader – to an additional higher band of council tax”, says the paper.
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“Some Tory advocates of the move point to New York, where property taxes are much higher. But the fact that an idea originally floated by Labour is being discussed by the Government will infuriate many Tory activists,” it adds.
Politics Home says Labour’s plan “was widely derided by the Tories” at the time, with Johnson himself attacking the idea to slap a levy on homes worth £2 million, calling it a “tax on London” when he was mayor of the capital.
He said it would "totally clobber” families and the elderly who lived in high-value properties but were cash-poor, saying the idea was “deeply unpopular”.
Any effort to target owners of expensive homes is “likely to face strong resistance” says the Daily Mail. “Many householders in London have benefited from rocketing price rises, but while they are asset-rich they do not have money available to pay such taxes”.
City A.M. says the new tax would “disproportionately hit London and the South East” but help pay for the Conservatives’ election pledge to spend £100bn on infrastructure, most of it located in the Midlands and the North.
The Financial Times reports that the Treasury is also considering slashing pension tax relief from 40% to 20% for those earning more than £50,000. This would raise an extra £10 billion per year.
“Boris Johnson has been keen to show Northern voters that backed him in last year's general election that the party hasn’t forgotten them,” says The Sun but “any major tax raids would be sure to alienate traditional Tory voters.”
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “It seems to be a misunderstanding of what the Tories’ new voters were looking for”.
“They may be new converts to the message, but they still expect the Conservatives to be the ones backing them when they succeed. Levelling up doesn’t mean cutting other people down,” he said.
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