Comment: ‘Mansion tax on Hampstead and Highgate homes will help save our NHS’

Labour's shadow chancellor Ed Balls. Picture: PA Wire/Yui Mok.

Labour's shadow chancellor Ed Balls. Picture: PA Wire/Yui Mok. - Credit: PA Wire/Press Association Images

In London and across the country our NHS is going backwards. It’s getting harder to see a GP, nurses have been cut and waiting lists are going up. There’s a looming crisis as the pressure on NHS budgets gets tighter.

So the choice is either to allow the NHS to continue going backwards, or accept that – alongside reforms – the NHS needs more funding. Labour will not duck this challenge.

If we win the election we will raise £2.5 billion a year, on top of the Tory spending plans we inherit, for an NHS Time to Care Fund.

This will support an additional 20,000 nurses and 8,000 GPs and help us guarantee patients will wait no longer than one week for cancer tests and results by 2020.

Alongside a levy on tobacco firms, action to tackle tax avoidance and close loopholes, £1.2 billion will be raised through a tax on prime value properties worth more than £2 million today. Even in London where prices have been soaring, that’s less than three per cent of homes.

But Labour MPs and candidates in London like Tulip Siddiq, Sarah Sackman and Catherine West have rightly been clear with me that this must be done in a fair and proportionate way, with protections for pensioners and others on modest incomes.

So I am setting out how we will ensure ordinary Londoners are protected while wealthy foreign investors finally make a proper tax contribution in this country.

Most Read

First, as I said earlier this year, we will protect people on modest incomes like pensioners. Long-standing residents who now find themselves living in high-value homes but do not have an income high enough to pay the higher or top rate of income tax – in other words earn less than £42,000 a year – will be guaranteed the right to defer the charge until the property changes hands.

Second, we will guarantee that more modest properties are not brought into the scope of the tax. The Conservatives have been spreading desperate smears that properties worth far less today – even £1 million – will end up paying. This is simply untrue.

We have always said that we will raise the starting threshold as prices rise. Rather than raising it in line with overall inflation, we will do so in line with the average rise in prices of high-value properties over £2 million.

This will ensure that the number of properties paying the tax will not increase. And if prime property prices continue rising then by the time the tax is introduced the starting point will be higher than £2 million.

Third, the tax will be progressive. We will ensure those owning properties worth £2 million-£3 million will only pay an extra £250 a month through this new tax, the same as the average top band of council tax.

Owners and investors in properties worth tens of millions – who currently pay the same in council tax as a family in a £1million home – should make a much bigger contribution. And we will look at asking overseas owners of second homes in the UK to make a larger contribution than people living in their only home.

Labour will not allow our NHS to continue going backwards. That is why we are making a difficult but fair choice with this tax. We will do it fairly and carefully. The future of our NHS depends on it.