Tax Fairness

Debate between Mark Reckless and Stephen Williams

Tuesday 12th March 2013 Commons Chamber

[Mark Reckless (Rochester and Strood) (Con)]

It is a pleasure to follow the hon. Member for Dumfries and Galloway (Mr Brown), who ingeniously addressed the topics of both of this afternoon’s debates and some even broader topics.

I will confine my remarks to the taxation of high-value property. The motion refers to a mansion tax on properties worth more than £2 million. A serious problem with the motion is that the Government have already brought in a range of measures to increase the incidence of tax on the owners of properties worth more than £2 million. No definition of “mansion tax” per se is provided in the motion.

The Leader of the Opposition hypothecated the revenues that would purportedly be raised by the mansion tax to reintroduce the 10% rate of tax, which was abolished by the previous Government. The cost of that would be some £7.3 billion. Research that was published recently shows that to raise that amount of money, a so-called mansion tax would have to be introduced not on properties worth more than £2 million, but on properties worth more than £415,000. It may be that the Opposition wish to tax people in that class of income more. Perhaps they think that they are rich, are benefiting too much and need to pay more to the Government. I look forward to their fighting the next election on that basis.

Meanwhile, our coalition partners have said that there should be a mansion tax that applies only to residential property worth more than £2 million. However, we have also heard from the Liberal Democrats—I am not sure whether it came from the federal policy committee or quite how they develop these policies—that it would apply not just to mansions above £2 million, but to property generally above £2 million. It is therefore just as important for somebody who has 10 flats worth £200,000 each to pay the extra tax as somebody who has a so-called mansion worth £2 million. Apparently, they are going to go further and inspect the contents of jewellery boxes and levy taxes on those as well.

[Stephen Williams]

My hon. Friend is setting various hares flying across the field. Of course, I am not in favour of hunting, but those hares need to be stopped from running. The jewellery tax is complete nonsense. As I have said many times on the record, we are not in favour of a net wealth tax that allows HMRC to look beyond people’s front doors. On the property portfolio, if somebody owned 10 flats, the nine that they did not live in would probably be attracting rental income and so would already be taxed. A mansion tax would apply to somebody’s principal residence if it was worth more than £2 million.