Miliband "to levy mansion tax on homes worth over £2m" ED MILIBAND has made a dramatic bid to outflank David Cameron on the economy by calling for the 10p rate of income tax to be brought back The Labour leader said his predecessor, Gordon Brown, had been wrong to scrap the band in 2008, and restoring it would help millions of hard-pressed families. The move could be funded by a new "mansion tax" on homes worth more than £2 million, he insisted. The announcement was a surprise inclusion in a keynote speech that had been billed as featuring no significant policy. Tory backbenchers have been campaigning for the 10p rate to be reintroduced in next month's Budget, and the Prime Minister hinted on Wednesday that he was ready to agree. But Mr Cameron was left struggling to regain the initiative yesterday, accusing Labour of "cobbling the idea together overnight." Meanwhile, the respected Institute for Fiscal Studies (IFS) think-tank complained that there was "no plausible economic justification" for reintroducing the 10p rate, saying Mr Miliband was displaying a "remarkable failure to learn from history." Conservatives also warned that the mansion tax plan would trigger a wide-ranging council tax revaluation, and questioned how much revenue would be raised. Speaking in Bedford - where Tory premier Harold Macmillan delivered his famous "You've never had it so good" line in 1957 - Mr Miliband said the country's fortunes were very different today. "A One Nation Labour Budget next month would lay the foundations for a recovery made by the many, not just a few at the top," he said. Let me tell you about one crucial choice we would make, which is different from this government. We would tax houses worth over £2m. And we would use the money to cut taxes for working people. We would put right a mistake made by Gordon Brown and the last Labour government. We would use the money raised by a mansion tax to reintroduce a lower 10p starting rate of tax. This would benefit 25 million basic-rate taxpayers - moving Labour on from the past and putting Labour where it should always have been: on the side of working people. Mr Miliband said the policy demonstrated Labour's "priority to do everything we can to make a difference to people's living standards." "When you play your part, when you make your contribution to the economy, you will be rewarded," he said. He admitted that the tax proposals did not amount to a manifesto pledge but insisted he was sending a "clear signal" about what the party would do in power. A senior Labour source said the mansion tax - long a Liberal Democrat policy - was expected to raise £2 billion a year. That would fund a 10p rate on up to £1,000 of taxable income. Some 25 million basic-rate payers would be up to £100 better off as a result, with the 40p threshold coming down slightly to ensure higher-rate earners did not benefit. The party remains committed to maintaining the £10,000 personal allowance threshold, which is due to be reached by 2015, according to a source. Shadow chancellor Ed Balls said that he and Mr Miliband tried to prevent the 10p rate being scrapped by Mr Brown. "Ed Miliband and I said to Gordon Brown before the Budget in 2007 that we shouldn't do this," Mr Balls said. Clearly, we then defended it on the basis of collective responsibility. I said at our conference a couple of years ago that it was a mistake to cut the 10p rate. When Ed Miliband and I talked when I first became shadow chancellor, we both said that it was a mistake and we needed to reinstate it. However, Downing Street dismissed the announcements as "a stunning admission of economic incompetence" from Mr Miliband and Mr Balls. The low-income working people who lost out the most from Labour's 10p tax hike now pay no tax at all thanks to this government's record increases in the tax-free personal allowance. Losers under Labour have become winners thanks to our tax changes. Now Labour's new homes tax would mean government snoopers in every home to revalue your house for council tax, meaning council tax rises for millions.