For those of us who believe in progressive taxation the last few weeks in London Labour have been pretty dismal.
We seem to have an array of Labour MPs (mainly wannabe London mayoral candidates) and council leaders rushing to the press denouncing the proposed mansion tax as a’ tax on London’ (or if they were more honest a tax on the rich parts of London). Yes the promotion of the Mansion Tax has been inept and it would more accurate to call it a land value tax. For all that it is a progressive tax, one that will raise much needed funds for the NHS and also bring some economic sanity to the property market in London.
If any of those Labour representatives had bothered to do a little research they would have realised that London property at valuations above £2 million is barely taxed in comparison to other international cities most notably New York. More to the point the increase in value in the last 20 years has not been the product of hard work or building a new kitchen but it is a ‘lottery win’ caused by a huge influx of foreign funds and our inability/incompetence to build new housing at anything like the scale needed. We do not complain when actual lottery winners pay tax on their winnings so why should we complain when those who have benefitted most from the property lottery are asked to do the same?.
The wilful ignorance of the Labour apologists is truly astonishing. The vast majority of the property rich (ie those who have properties worth between £2 and £3 million) will be asked to pay an additional £3000 a year. For those who can’t afford that amount they will be able to roll up the payments until their property is sold (when all the capital gain is tax free remember). That hasn’t stopped the Labour leadership of Hammersmith and Fulham joining with the Tories and saying that this property tax will drive long standing residents from the borough.
Perhaps the point when my eyes went on stalks was when that darling of the left Diane Abbott appeared on the front page of City AM (the house magazine for City Traders and Bankers) expressing concern at the impact of the mansion tax. I think our London MPs need to remember where their principle loyalties lie – to Labour voters throughout Britain. Yes the mansion tax is a ‘tax on London’ but only to the extent that Corporation Tax on Banks is a tax on London because that’s where the money is.
The campaign against the Mansion tax is a self serving one fuelled by a media who are largely part of the property elite. Remember that the vast majority of the public support it including the vast majority of Londoners.
Let’s remember the real victims of the London property market. The thousands living in cramped and over-crowded properties and ‘Generation Rent’ the millions who have no chance of ever owning a property and condemned to pay ever increasing rents. One fortunate consequence already of the discussion about the Mansion Tax (never mind its implementation) is that it is having a dampening impact on property prices and acting as a deterrent on the foreign rich who view London property as a bank account rather than a home.
To reform the property market in London and build the homes we need will require political courage and determination to take on the numerous vested interests. A Mansion tax is an integral part of this reform – we should not fall at the first hurdle.
Let’s use the opportunity of the London Regional Conference on November 30th to remind our potential mayoral candidates and others the real views of London Labour members.
It’s about time they spoke for London rather than act as advocates for the property elite.