THREE potential London mayoral candidates have expressed doubts about a mansion tax for London.
Labour MPs Dame Tessa Jowell, David Lammy and Diane Abbott all spoke out against a flat-rate of tax for property worth over £2m in the capital, signalling a departure from Ed Balls’s line on the policy.
Jowell told an event organised by Progress magazine that the tax would cause problems for some of her constituents.
“They are people who bought homes maybe 20 or 30 years ago for a fraction of what they are worth now. They are people maybe becoming elderly who are asset-rich and income-poor,” she explained.
“It’s fine to say we’ll impose a mansion tax, but for these people they would have to move out of their family homes. Let’s be wary of the perverse effects of that.”
The Labour party has proposed a mansion tax in order to pay for a lower starting tax rate of 10p.
David Lammy, who has been vocal about the need to appeal to a broad range of Londoners and not just the Primrose Hill elite, told City A.M. that he couldn’t support a flat-rate mansion tax.
“We’ve got to be careful that this is not a tax on London,” he said. “I’m not against a mansion tax in principle, but it absolutely must take into account geographical location and it’s got to have the appropriate banding in relation to that geography, so that it is fair.”
Lammy added that he would like to see the Mayor’s office retain stamp duty, something that current Mayor Boris Johnson has proposed.
“In tough economic times we have to look more closely at the way in which London’s government can reinvest some of the funds that are generated here to make the city work better. We do need a government that better facilitates London and stamp duty is one way of doing that,” he said.