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David Miliband: ‘mansion tax’ will help poor

Owners of homes worth more than £2m should pay an annual “mansion tax” to help the poor, a Labour leadership contender said yesterday.

Shadow Foreign Secretary David Miliband said the levy would raise £1.7bn to restore housing benefit for the least well-off.

The proposal — outlined in an interview with the Evening Standard — appears designed to drive a wedge between the coalition partners, as well as appealing to Labour grass roots. Business Secretary Vince Cable put the idea in the Liberal Democrat General Election manifesto but it was lost during negotiations with the Tories.

Under the plan, owners would have to pay a 1% levy on a property's value above £2m.

Mr Miliband said the money raised would allow Labour to reverse the coalition's proposals for slashing housing benefit costs by cutting the current rates paid on behalf of tenants.

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