Jim Murphy under fire from Mayoral candidates for ‘taxing London’ comments

Several potential Labour candidates for London Mayor have hit out at Scottish Labour leader Jim Murphy, following his comments concerning the Mansion Tax funding extra nurses in Scotland.

Announcing his pledge of a thousand more nurses north of the border, Murphy said: “We will tax houses in London and the South East to pay for 1,000 new nurses in the Scottish NHS. It’s a real win-win for Scotland.”

David Lammy, Tessa Jowell and Diane Abbott have all raised their concern at Murphy’s comment, with all three warning that it was unfair to use a tax that would hit Londoners hardest if the majority of the money was not then spent in London.

Jowell said that it was wrong to treat London as “a cash cow”, and Lammy said he did not like “that up to 90 per cent of it will come from the pockets of Londoners while only a tiny proportion will be spent on London’s public services.” Abbott, meanwhile, said “our great cities, like London, should be allowed to keep their property taxes.”

This culminated with Abbott appearing on BBC’s World At One programme, to say that Murphy cannot “expropriate money from London to win an election in Scotland.”

Jim Murphy also appeared on the programme, saying:

“What I’m doing is arguing for and supporting the British Labour Party policy, which is that for houses over £2 million we would introduce a Mansion Tax. People That’s with houses in Scotland over £2 million would pay it, in Northern Ireland, in Wales and in England. It’s a tax across the whole of the United Kingdom.”

“The way in which the UK works is the pooling and sharing of resources.”

Ed Miliband announced a Mansion Tax at Labour Conference in September, pledging that the money raised would go to funding the NHS. Jim Murphy says that his policy is simply what he would do with Scotland’s share of this tax revenue.

Update: Diane Abbott has repeated her criticisms of Murphy in a piece for Comment is Free, here’s a flavour of what she’s written:

“Let me stress that I support the mansion tax in principle. It is a redistributive tax, which is important, and taxes on assets are always worth considering.

The complication is that it is, in effect, a tax on London, 80% of which will be paid by people in London and the south -east. And the distorted nature of London’s housing market could mean a tax with wildly distorted effects. No one really knows how much it will raise. It seems likely that the people everyone agrees should pay it – the international super-wealthy – will use their expensive lawyers and accountants to evade it.

But it will hit older Londoners, often public sector workers who bought houses in what were then unfashionable parts of London, as in my constituency, Hackney North and Stoke Newington. Now they are living in houses worth £1m and rising. They are often asset rich but cash poor. Having seen London house prices spiral in value, they are not reassured by the idea that the mansion tax kicks in only at £2m. At the very least, a lot of work needs to be put in to reassure those voters, and to fashion a tax that will not hit those people unfairly. Fortunately the shadow chancellor, Ed Balls, has an open mind on the subject.

That is why it is surprising that Murphy has jumped in feet first, boasting about how he will spend money from a tax when there is no agreement on exactly how it will be levied.”