Ed Balls: ‘Mansion tax won’t force Hampstead and Highgate residents out of homes’

Shadow chancellor Ed Balls. Picture: PA Wire/Stefan Rousseau.

Shadow chancellor Ed Balls. Picture: PA Wire/Stefan Rousseau. - Credit: PA Wire/Press Association Images

Labour’s shadow chancellor Ed Balls has moved to reassure Hampstead and Highgate homeowners who fear they could be forced to sell their homes due to his proposed mansion tax, insisting the policy will be “fair and proportionate”.

Writing exclusively in the Ham&High, Mr Balls said he had noted the concerns raised by the area’s Labour parliamentary candidates about the need to protect residents who could not afford to pay the annual levy on their £2million-plus homes and would ensure there are “protections for pensioners and others on modest incomes”.

In light of fears that the policy could cost Labour seats in marginal constituencies like Hampstead and Kilburn, his comments are seen by some as an exercise in damage limitation for Labour candidates in constituencies set to be hardest-hit by the mansion tax.

Referring to Labour’s bid to increase NHS funding, Mr Balls writes: “Alongside a levy on tobacco firms, action to tackle tax avoidance and close loopholes, £1.2 billion of this much-needed revenue will be raised through a tax on prime value properties worth more than £2 million today.

“Even in London where property 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.”

Mr Balls’s latest comments have answered some of the questions arising from Labour leader Ed Miliband’s annual party conference speech, when he announced plans for a mansion tax.

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The shadow chancellor has now made it clear that anyone living in a £2m-plus home and earning less than £42,000-a-year will not have to pay the tax until they sell their home, at which point the government will take an accumulated amount.

He has also dismissed claims that the average annual levy on homes under the policy would be £12,000, pointing out that residents living in homes worth between £2m and £3m would have to pay £250 a month through the new tax.

Mr Balls said owners of homes worth tens of millions of pounds and overseas owners of second homes in the UK, such as owners of properties in The Bishops Avenue, would make much higher contributions.

Sarah Sackman, Labour’s prospective parliamentary candidate for the Finchley and Golders Green constituency, which includes The Bishops Avenue, said 98 per cent of her constituency would be unaffected by the tax.

She said it was “fair, simple and would help pay to save the NHS”.

Tulip Siddiq, Hampstead and Kilburn Labour prospective parliamentary candidate, said: “I joined the Labour Party because of the NHS and I’m proud that we’re putting it back at the centre of our values.

“I’ve been in talks with Ed Balls since this tax was announced because we need to make sure those who may be income-poor but asset-rich are protected.”

Hornsey and Wood Green Labour prospective parliamentary candidate Catherine West said the NHS was her “top priority”.

She added: “I am pleased that the shadow chancellor has ensured some protection for asset-rich, cash-poor households in London and that he has unveiled those to Ham&High readers today.”