Mansion Tax - Labour say yes

Now Labour are backing a Mansion Tax and offering to work with the government to introduce it.

The shadow chancellor Ed Balls told me on a visit to the West Midlands that he will support a tax on expensive properties if the chancellor decides to back the idea promoted by the Liberal Democrats.

"If the chancellor wants to go down that road then we will support him. You've got to get the details right. You can't afford to have people thrown out of their homes because they can't afford to pay the tax. Don't mess this up. Let's work together".

However, Ed Balls insists that any money raised by a mansion tax should be spent on reversing cuts to tax credits and not cutting the top rate of tax.

"The issue is what's the purpose? If the purpose is to help families facing higher tuition fees, higher VAT or higher fuel bills - for example boosting their tax credits - yes. But if the priority is, as George Osborne seems to be saying, that he will only use the Mansion Tax to help people on incomes above £150,000 I say that is out of touch with the struggle families are facing and won't help get people into jobs."

I asked the shadow chancellor whether he still believed that the top rate of tax should be extended to those earning over £100,000 a year and not £150,000 as now - a policy he argued for in the Labour leadership election. He said that wasn't party policy and ruled it out for the future.

He repeated his call for a stimulus in the Budget to get the economy moving again insisting that the British economy was underperforming.

Update: 1738 GMT: Ed Balls set out his views on the top rate of tax in his Bloomberg Speech on 27th August 2010: "We need to do more to raise taxes fairly - such as starting the top rate of tax at £100,000."

After he became Shadow Chancellor he told Andrew Marr on 30th January 2011: "Well, look, that was what I was saying during a leadership election campaign. We've not sat down and discussed tax policy. Our position is clear: we think that for this parliament, and probably into the next, we'll keep the top rate of tax at £150,000."

A few days earlier - on the 25th January 2011 - he told the Daily Politics "I stand by every paragraph in that speech", although he may have meant every part of his warning that austerity was destroying confidence and growth and an economic stimulus was required.