Kemi Badenoch warns today that Labour is plotting a tax raid on homes for the billions needed to fill the fiscal black hole.
The Tory leader says Rachel Reeves saw property as a ‘cash machine’ to plug the gap in the public finances.
The Chancellor is coming under pressure from both flanks of the Labour Party to bring in a ‘wealth tax’.
She must find £50billion in tax rises or spending cuts to balance the books, the National Institute of Economic and Social Research (NIESR) said last week.
Writing in the Daily Mail, Mrs Badenoch warns that Labour could change council tax bands or introduce a tax on the value of land, adding: ‘A home is more than bricks and mortar. It is the reward for years of hard work, saving and sacrifice. It is security for our families. And it should not be treated like a cash machine for the Chancellor.’
She says a plan by Labour’s Welsh government to target property wealth by revaluing homes and pushing them into higher council tax bands could be introduced in England.
And she raised concerns Labour could adopt a suggestion in the NIESR report that the party should introduce a ‘land value tax’. The respected think-tank said the Chancellor should consider reforming council tax or even replacing it altogether with a land value tax.
This tax, once championed by the party under Jeremy Corbyn, would replace stamp duty and council tax by introducing a flat levy on the price of land.
Kemi Badenoch warns that Labour could change council tax bands or introduce a tax on the value of land
Badenoch raised concerns Labour could adopt a suggestion in the NIESR report that the party should introduce a ‘land value tax’
The idea was last seriously proposed by David Lloyd George in 1909, but fears that it could become a new poll tax have deterred successive governments. Ms Reeves is under pressure from the Left and Right of her party to reform property taxes as MPs warn that the current system is unfair.
Blue Labour, an influential faction within the party that is economically Left wing but culturally conservative, wants an overhaul of taxation on homes.
Earlier this year it urged the Chancellor to consider changing council tax rules so that poorer parts of the country were not hit unfairly, adding: ‘Our tax system needs reform to reflect new realities, including that most value is tied up in land and assets rather than income.
‘We should consider taxes on assets, and updating council tax bands to ensure it no longer disproportionately hits those in poorer parts of the country.’
Mr Corbyn’s new party is expected to call for a land value tax to replace council tax. Other supporters include Labour peer Dame Margaret Hodge, Tory chairman Kevin Hollinrake and the TaxPayers’ Alliance. But a Treasury source had ‘not heard’ that such a tax might come in.
Housing Secretary Angela Rayner is planning the biggest shake-up of local government funding in more than a decade to divert money from the South to more deprived areas.
The Treasury said: ‘The best way to strengthen public finances is growing the economy, which is our focus. Thanks to our planning reforms, the Office for Budget Responsibility has said the economy is expected to grow by the end of the decade.’
During the general election Labour said it was not planning to reform council tax and ruled out rebanding properties.
KEMI BADENOCH: Labour’s council tax rises are a cynical raid on the very people who keep this country going
Labour are spending the summer warming us all up for more tax rises in the autumn… to fix the mess they made.
Rachel Reeves‘s business-squeezing budget has led to rising unemployment, lower growth and a stagnant economy.
The latest estimates suggest her economic mismanagement has blown a £50billion hole in the public finances.
And, as ever, Labour’s answer to their problems is even more tax rises.
Despite promising to freeze it before the election, council tax is going through the roof under Labour. In the small print of the Spending Review it says that council tax bills are set to rise by £700 on an average Band D home over this Parliament.
But this isn’t enough for Rachel Reeves.
In Wales, Labour is already planning higher council tax bands to get after ‘property wealth’. They’re trialling something even more dangerous – re-valuing homes to push them into higher council tax bands. They’ve developed a database to work out how much your home should be taxed – tax tech which could then be deployed in England by the Valuation Office Agency.
If you’ve worked hard, improved your home, or simply live in a nice area, your bills could soar. And Starmer has called Wales his ‘blueprint’, so you can bet it’ll be coming to England next.
Labour’s friends in the think-tank world want to go one step further and are pushing for a ‘Land Value Tax’. Not for the big property developers, but an old Jeremy Corbyn policy designed to tax not just your home, but the land it sits on. Tough luck if you’ve got a garden or a nice view.
This tax, once championed by the party under Jeremy Corbyn, could be brought in by Prime Minister Keir Starmer
Chancellor Rachel Reeves speaks to media as she visits the coal tip in Wales last week
There would be no discount for single people. Widows and widowers would be hammered. And pensioners would be forced to pay this new bill even after death – a ‘pay-as-you-die’ tax that’s basically inheritance tax in disguise.
The Conservatives were pressured for 14 years to do this, and we refused. We understood then, as we do now, that hard-working families cannot afford to be taxed out of their homes.
Labour doesn’t care. They see your home as just another line in the ledger that they can tax whenever they run out of money. Given their record so far, this will be often.
Reform are no better, creating new economic black holes as they promise billions in welfare spending with no plan to pay for any of it.
I will fight this with everything I have. Because a home is more than bricks and mortar. It is the reward for years of hard work, saving, and sacrifice. It is security for our families. And it should not be treated like a cash machine for the Chancellor.
Labour’s land tax will be nothing more than a cynical raid on the very people who keep this country going.
Under my leadership, the Conservatives will always defend property rights, sound money and low taxes.
We will back the makers in this country – the people who do the right thing, pay their way, and just want to get on. And we will not stand by while Labour taxes your home to the hilt.
We will oppose the Government if they try and punish those families and pensioners who have worked hard, and saved and invested in their homes.
