Reform UK's motion condemning the incoming High Value Council Tax Surcharge, commonly known as the 'mansion tax', passed at the London Assembly after Labour members abstained, prompting accusations that the party is failing to stand up for the capital. Reform AM Alex Wilson said Prime Minister Andy Burnham views London as a "cash cow" to fund other commitments.
Reform's motion and Labour's abstention
The motion, proposed by Reform UK, called on the Mayor of London to publicly oppose the Prime Minister and Chancellor's proposed tax reforms and to write to them to that effect. It stated that London is the largest regional contributor to the Exchequer and one of only two regions that consistently generates a net fiscal surplus, arguing it is wrong to impose further tax burdens on London's residents.
The proposal passed by eight votes to two, but only because Labour Assembly Members abstained rather than voting against it. Mr Wilson told the Local Democracy Reporting Service (LDRS) that City Hall Labour abstained "as not to upset the new Prime Minister who views London as nothing but a cash cow." He added, "They've put self-interest before public service and will pay the price for it at the ballot box in 2028."
The mansion tax and its impact on London
The mansion tax will see homes valued at more than £2 million pay between £2,500 and £7,500 each year from April 2028. Around 165,000 homes are set to be affected, most of them in London. Four boroughs – Wandsworth, Kensington & Chelsea, Westminster, and Richmond – have written to Chancellor John Healey urging him to reverse the levy.
Mr Wilson said, "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."
Labour's response and government's defence
Leonie Cooper AM, Labour's Deputy Leader on the London Assembly, defended the abstention: "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."
The motion is non-binding, but the Mayor must 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."
