Labour criticised after abstaining on London ‘mansion tax’ motion

Reform UK assembly members called on their Labour colleagues to condemn the tax on properties worth more than £2million reports Kumail Jaffer, Local Democracy Reporter

Two men and two women sitting behind a long table — Labour assembly members – (Credit: Kaveen Dhesi/London) Assembly

Labour assembly members have been accused of refusing to stand up for London after choosing to abstain on a motion condemning tax reform which could adversely impact some boroughs in the capital.

Reform UK had proposed a motion condemning the incoming ‘mansion tax’ – also known as the High Value Council Tax Surcharge – which will see homes valued at more than £2million pay between £2,500 and £7,500 each year from April 2028.

Around 165,000 homes are set to affected – most of them in London – with four boroughs, Wandsworth, Kensington & Chelsea, Westminster, and Richmond, writing to Chancellor John Healey this week urging him to reverse the levy.

The issue was raised by assembly member Alex Wilson in City Hall last week, who said new Prime Minister Andy Burnham viewed London as a “cash cow” to fund other commitments.

“The assembly recognises that London is the single largest regional contributor to the Exchequer, and one of only two regions that consistently generates a net fiscal surplus,” the motion read.

“Therefore, this assembly believes it wrong to impose further tax burdens on London’s residents.

“This assembly calls on the mayor to stand up for Londoners by publicly opposing the prime minister and chancellor’s proposed tax reforms, and to write to them to that effect.”

The proposal successfully passed by eight to two – but only because Labour assembly members abstained, rather than voting it down.

Wilson told the Local Democracy Reporting Service (LDRS) that City Hall Labour did so “as not to upset the new prime minister who views London as nothing but a cash cow”.

“They’ve put self-interest before public service and will pay the price for it at the ballot box in 2028,” he added.

“Andy Burnham’s proposed tax raid on London would be to kill a golden goose. London contributes more to the public coffers than any other region in Britain.

“It’s not fair or moral to impose further taxes on our city when our economy is already suffering because of two years of Labour’s fiscal mismanagement.”

However, Leonie Cooper AM, Labour’s deputy leader on the London Assembly said: “This motion asked the assembly to oppose the government’s reforms outright.

“The Labour group don’t think that is the right position while the final arrangements on High Value Council Tax Surcharge are yet to be finalised. That is why we abstained.”

Though the motion successfully passed, it is non-binding. The mayor does however have to formally respond, usually within a few weeks.

A spokesperson for the Mayor of London said: “The mayor has always been clear that London must receive a fair funding settlement which reflects both the capital’s contribution to the national economy and the significant pressures facing Londoners and our public services.

“Decisions on taxation and the local government funding formula are matters for the government. The mayor will consider the detail carefully and continue to stand up for London to ensure the capital’s needs are properly taken into account and its essential public services are protected.”

A government spokesperson said: “We’re fixing an outdated funding system so funding goes where need is greatest – addressing a longstanding unfairness where a Band D home in Darlington or Blackpool pays more in council tax than a £10 million mansion in Mayfair.

“The mansion tax is expected to raise around £430 million per year to help fund public services – and applies to less than 1% of properties across England, based on property value, not location.”

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