Westminster North Conservative Candidate Lyndsey Hall has been accused of ‘cheap tricks’ for sending out misleading and inaccurate letters about Labour’s Mansion Tax proposals.
Writing in ‘The Spectator’, Damian Thompson reveals in his article, ‘Look at this cheap trick the Tories tried to play on me’:
“‘Mansion Tax Revaluation Information’, said the letter that came through my letterbox, in an envelope that screamed ‘council’ or ‘taxman’ or something alarming.
The letter inside was carefully formatted to look official. ‘Your property has been identified as one which could be affected by Ed Miliband’s “Mansion Tax”. This could leave you with an additional bill of more than £20,000 per year.’
And then: ‘Labour has promised to introduce the Mansion Tax immediately. The Inland Revenue will send out demands for payment after the budget in June. That is three months away, are you ready and able to pay Labour’s Mansion Tax?’
You had to turn over the page for the first mention of the word ‘Conservatives’ – the people responsible for this embarrassing stunt. It was signed ‘Lindsey Hall, Prospective MP for Westminster North’.
I wasn’t taken in for a second, but what about the old lady down the road? And what’s all this crap about ‘your property’ being in line for the Mansion Tax? It’s a flat, in a building obviously made up of flats – clue: all those doorbells.
Ms Hall was going to get my vote. Now I’m not so sure. If this is the quality of Lynton Crosby’s campaign tactics, no wonder the Tories aren’t pulling ahead in the polls. Honestly, it’s worthy of the Lib Dems.”
Councillor Paul Dimoldenberg, Leader of the Labour Group, said:
“We are disappointed, though not surprised, that the Conservatives are putting out a blatantly misleading leaflet and causing many people unnecessary concern. It shows just how desperate the Conservatives are that they have plunged to such depths that even their own supporters are having doubts about voting for them”
“It is simply untrue that cheaper properties will be included. Indeed, the only person who has proposed a fuller revaluation of Council Tax to include cheaper properties is Conservative candidate, Lindsey Hall, who wrote in the Evening Standard “ the cure for inequity in housing lies in re-banding council tax…perhaps with a “super-band” reflecting genuine mansion status”.
The Mansion Tax – The Facts
Labour’s proposal is for a new charge on properties that are already valued over £2 million in order to generate additional income for the NHS. The flowing commitments have been given:
• No property valued at less than £2 million will be included and this threshold will be uprated in line with prime value property inflation. (It is estimated that around 0.04% of properties in the country fall into this category. The threshold is around 4 times the average London property price and double the Westminster property price- despite the borough including Knightsbridge, Belgravia and Marylebone).
• The charge will be £250 per month for properties valued between £2 and £3 million (equivalent to the average Band H Council Tax across the country). Further bands will apply to properties valued above £3m. The charge is not, and has never been proposed as, 15% of the value of the property.
• All but higher-rate taxpayers will be able to choose to defer the charge until the property is sold at a time of their choosing. (As only 5% of pensioners are higher rate taxpayers, I really hope that this should go a long way towards reassuring the older, longer-standing residents in higher value homes).
Annual property taxes have become increasingly inequitable over the last 25 years. As former Times editor Simon Jenkins recently pointed out:
“Houses in parts of Westminster, Kensington and Camden that are now worth over £2m were in 1990 paying between £3,000 and £10,000 in rates. Had the rates not been abolished, mere inflation would now have them paying £6,000-£20,000. That is without revaluation or any increase in the cost of local services, which would have pushed some rates to more than £50,000”
This view is broadly reinforced by the Institute for Fiscal Studies, whose recent Green Budget stated:
“ …the (current) council tax rates applied to each band are far from proportional to property value: people occupying more valuable properties pay a smaller percentage of the value of their property than those in less valuable properties…….there is a strong case for taxing high-value properties more heavily than at present given that they currently attract lower council tax as a proportion of property value”
Conservative MP for Westminster South, Mark Field is just the latest to come out in favour of some form of Council Tax re-banding and the addition of new bands at the top for very high value properties- the latter being very similar in principle to a ‘Mansion Tax’. He says:
“..the (current Council) tax is not even particularly proportionate to property values, with the same amount levied on all homes valued at over £320,000 in 1991 prices. This means that around half of all houses in the capital are now placed in the same council tax band even if their size, location and value are vastly different. A Knightsbridge oligarch, for instance, is paying £1353.48 annual council tax for a £60 million home – exactly the same as properties worth one-thirtieth that sum.
Let us take Westminster as our example here. In this Central London borough, a Band H property would now likely be worth over £2 million and there are now just under 15,000 of such homes. But there is a vast difference between a £2 million flat in Pimlico and a home valued at £60 million at One Hyde Park. So the local authority might be empowered to impose two additional bands – there could be, for instance, Band H for prime properties worth between £2 and £5 million; Band I for so-called ‘intermediate prime’ properties in the £5 to £15 million bracket; and finally Band J for super prime properties worth over £15 million”
Steven Norris, who was the Conservative candidate for Mayor of London, is just the latest to support the principle, saying last week:
“In the top band of council tax, because I live in Wandsworth, I pay under £1,000 a year and if my house was worth £20m I’d still pay £1,000. I mean that’s just lunatic….What’s quite interesting to me is that the Mansion Tax will in the end be effectively an amendment to council tax and not before time.”
So we are increasingly no longer debating whether to raise the annual property charge on very high value homes, but how this is best done, where to direct any money raised (the NHS, housing) and the best means of protecting those who are ‘asset rich but cash poor” (the quite limited Council Tax Benefit or a more generous deferral option). These are all important questions, but they are quite separate from the issue of whether there should be such increase in charges on ‘prime value’ properties at all.
Printed and Published by Andy Whitley on behalf of Karen Buck, both at Westminster North Labour Party, 4g Shirland Mews, London W9