Today’s revelation that Andy Burnham, a Labour leader hopeful, knew that the so-called mansion tax was “spiteful” could call the death knell for this much discussed income stream. The politician revealed that his mother had called him during the general election campaign to suggest that the mansion tax idea was “toxic” and a return to the 1970s. So, could this be the end of the mansion tax threat?
One day is a long time in politics!
While those with relatively expensive properties will be relieved to see a potential future Labour leader downplaying the mansion tax, as they say, a day in politics is a long time. This may well take some of the pressure of the incumbent Conservative government to push through with a stronger mansion tax policy but will it really impact the long-term potential for such a move?
It now appears that the Labour Party is admitting that one of the main policies of “fleecing the rich” turned voters away and had a massive impact upon the general election result. The fact the mansion tax could and would have impacted those rich in terms of assets but less well off in terms of liquid cash didn’t go unnoticed by the electorate. While the sudden lurch to the left during the general election campaign did grab the headlines it looks as though at least some of the potential leaders of the future are looking more to the centre ground – which Tony Blair managed to hold for some time.
Why is property so important to politicians?
The simple fact is that in this day and age property is seen as a reflection of your social status and your wealth. Different political parties look to appeal to different areas of society and the mansion tax seemed to be an extension of the “bash the bankers” policy adopted by all political parties. It does look as though the proposed mansion tax, which in theory had cross-party support, was a step too far and one which concerned the electorate.
There is no doubt that at some point in the future the subject of property valuations and taxation will clash yet again but at this moment in time perhaps the mansion tax is off the agenda?
Relief for the London property market
The London property market houses some of the U.K.’s most expensive real estate assets and would have been hit very hard by the introduction of additional property related charges. In practice the market would have learned to adjust to increased costs, as it has done in the past, but it may have caused some short-term uncertainty within the marketplace. The fact that London property enquiries picked up literally as soon as the general election result was announced shows that some investors were concerned about a radical Labour Party which had seemingly lurched to the left.
It will be interesting to see how this particular subject is covered by the media in the days, months and years ahead and indeed whether the Labour Party will quietly “kick this into the long grass”. The clever money would suggest that the mansion tax is off the table in the short term but is highly likely to return as and when governments require additional income streams.