Klass war? Labour has more work to do in selling its mansion tax

Myleene Klass’s anti-mansion tax outburst on The Agenda is evidence that Labour still has a long way to go in persuading the middle classes of its credibility on tax reform.

For some, Klass’s criticism of the mansion tax made her an ‘anti-tax Boudicca’, going ‘full Paxman’ on a visibly uncomfortable Miliband. For most, however, it was clear Klass was out of her depth. Erroneously claiming that £2 million barely afforded a garage in London, she also argued that those who would be ‘suffering’ from the tax would be ‘little grannies’ living not in mansions but in modest homes – despite Miliband’s explanation that the threshold would rise in line with average prices of high value properties meaning the number of those paying the tax would not increase over time.

Aside from the Daily Mail’s predictable celebration of Klass’s ‘sharper and more analytical mind’ trouncing the ‘vacuity and class envy’ of the Labour party, the public groundswell has largely found Klass’s position laughable. A fake donation page was set up on JustGiving to ‘help Myleene Klass pay her Mansion Tax’, while, rather irrationally, a petition has been set up calling for Klass to be dropped as the face of Littlewoods as her views insulted typical customers who are apparently ‘among the most hard hit by Britain’s current economic hardships’.

However, Klass’s outburst should remind Labour of the importance of embedding fairness throughout our tax system and economy. Without this, the extreme polarity of the rhetoric of ‘them’ against ‘us’ will leave the many who feel they fall somewhere in the middle without a sense of belonging within the Labour party.

Klass is not the first celebrity to struggle publicly with Labour’s position on tax. To less public attention, actor Griff Rhys Jones recently claimed he was ready to leave the UK in protest of the ‘colossal’ amount he’d be liable to pay under the tax. Sol Campbell has gone further in claiming Labour is the ‘grim reaper’ of the successful, while Michael Caine described himself as ‘very unhappy’ about the ‘preposterous and silly’ tax on high-value homes.

There can be no surprise that celebrities with estimated net worths of £11 million will find such proposals unpalatable. Unlike Conservative tax cuts which falsely claim to benefit everyone, radical tax reform in the interests of fairness and redistribution necessarily requires the proportional distribution of responsibility, which will always upset some people. In this way, the outcry of Klass and others is evidence of brave decision making on Labour’s part as to who should take most responsibility in the context of economic difficulty.

However, the ensuing ‘class war’ element of discussions about these ‘few fat geese’, according to Polly Toynbee, against the majority won’t help Labour win the much-needed support of the middle classes. While the proposed mansion tax will only affect around 100,000 houses, kicking in at the very high threshold of £2 million, and will include mechanisms to protect households who are ‘asset rich but cash poor’, polarised class rhetoric will continue to alienate many middle income households for whom high-value properties will never be a reality, but might always be an aspiration.

To persuade these middle households, taxing the worst excesses of property wealth must be pursued alongside other reforms. Introducing more council tax banding and updating property valuations (rather than using those from 1991) would make the burdens of payments fairer. In this way, moderately and relatively wealthy households can be distinguished from the wealthiest in tax burdens. Furthermore, though already called for by London Labour leaders to be pursued to replace the proposed mansion tax, there’s no reason why council tax reform and the introduction of a mansion tax should be mutually exclusive.

A fair, transparent and progressive tax system requires a sense of responsibility and proportionality at every level, for every social group to pay its fair share, not just continuously pitting the ‘many’ against the ‘few’. Redistribution is not simply about getting those on top to be publicly embarrassed into submission by everyone else.

We should absolutely tax wealth thoroughly and progressively. We should definitely address the stark inequalities of the property market. We should categorically ensure ‘those with the broadest shoulders pay the biggest burden’.

But when talking about tax and the economy, we can’t forget that a society is made up individuals, families and communities, not simply polarised classes of people. For now, Labour has the public on its side, with around 65 per cent of voters supporting its mansion tax proposals. However, it must not fall into debates in the extremities of class politics which may alienate those it desperately needs on side to win power next year.