Mansion tax plans 'played badly on the doorsteps in London', top MP warns amid party split
One in four detached homes in London could be caught if plans to lower the threshold go ahead
Labour's mansion tax plans have "played badly on the doorsteps in London", a top MP has warned - amid a backlash over changing the threshold.
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Hackney South and Shoreditch MP Meg Hillier told LBC that people buying homes in the capital "don't necessarily have much more income" after high stamp duties.
And she said that when the opposition party had floated a mansion tax under Ed Miliband in 2015, the idea hadn't gone down well in London.
Chancellor John Healey is said to be looking at whether to lower the starting threshold for the High Value Council Tax Surcharge from £2million to £1.5million.
The Treasury played down the reports as "speculation" ahead of the Budget.
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But Labour MPs in the capital are concerned about tens of thousands of extra homes being dragged into the extra levy under the pretence they are some of the biggest and most valuable homes in the country.
One in four detached homes in London could be caught if the threshold is lowered, analysis suggests.
Ms Hillier told LBC: "The Treasury Committee did look at property taxes last year ahead of the budget, and we heard from some very good expert witnesses about how challenging it is to fiddle around with one part of the system without looking at it as a whole.
With stamp duty rates as high as they are in London for a property, that size could be nudging £100,000 and then you pay a tax on top if you buy the home and as you say, a lot of homes in London are of that price.
"They don't necessarily have much more income.
"The other thing I would say is that when this was last mooted, and you know, or similar tax was last rooted, um by a labour, the Labour Party in opposition. It did play badly on the doorsteps in London."
MPs representing seats in inner London, where home values are higher, are "particularly concerned", one MP told us.
Another said: "There's no problems if it stays at £2million but if they start tinkering with it, I’ll have a different opinion."
Yesterday London Labour MP Rachel Blake, who represents the cities of London and Westminster, said it could have "unintended consequences".
She said: "I would be quite concerned about reducing the threshold.
"There's a vast deal of difference between £30million, £40million properties where you might not even have people living in them, compared to two-bedroom, three-bedroom family properties where their value has changed significantly over the last 40 years since the original council tax was designed and the valuations took place."
The Chair of the Influential Treasury Select Committee, Ms Hiller, said today the Office for Budget Responsibility should look longer term in their forecasting about the nation's finances.
But she insisted it should remain independent to ensure that they can continue to "mark the government's homework".