Proceeds from Labour’s so-called ‘mansion tax’ should be retained by London and used to fund a pan-London housing authority chaired by the Mayor, according to Hackney MP Diane Abbott.
The party is planning to impose a new property tax on homes worth £2m or more if it wins next year’s General Election and says any money raised would be spent on the NHS in England.
However with more than 90% of homes likely to be hit by the tax based in London, a number of senior London Labour figures – all potential Mayoral runners in 2016 – have criticised the proposal.
Ms Abbott has previously branded the idea “a tax on London” and, speaking at the LSE last night, said it would be very hard to sell the policy to London voters.
She suggested it would be easier to win public backing if, instead of being taken by the UK treasury, the money raised was hypothecated for a new pan-London housing authority which worked with boroughs to build new homes and lent mortgages to key workers.
The veteran Labour MP told her audience that ensuring nurses could afford to live in London was at least as important as ensuring the capital had enough nurses.
She also suggested a fairer approach would be to revalue council tax which is still based on valuations from the early 1990s but said this would be too politically unpopular for any government to implement.
Last night’s speech was part of a series of events being organised by the Government Department at the LSE.
