Labour MP and London mayoral challenger David Lammy. Photograph: Getty Images.
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David Lammy stands firm on opposition to mansion tax despite Balls concessions

The Labour London mayoral hopeful wants higher tax bands introduced by local councils. 

Against expectations, the biggest policy disagreement of last month's Labour conference was over the party's plan to introduce a mansion tax on properties worth more than £2m. Most of Labour's prospective London mayoral candidates (David Lammy, Tessa Jowell, Diane Abbott, Margaret Hodge), along with several party donors, criticised the idea, with only Sadiq Khan backing the party line. 

Ed Balls's piece in today's Evening Standard is aimed at resolving their concerns. After previously announcing that the threshold for the tax would be increased in line with house prices, rather than overall inflation, and that those who are asset rich but income poor (and who may struggle to afford the tax) would be offered protection, Balls has gone further today. He has announced that:

1. The threshold for the tax will be raised in line with house price rises over £2m, rather than the average increase. This will ensure that the number of properties paying the tax does not rise. 

2. Those on incomes below £42,000 (who do not pay the 40p rate of tax) will be "guaranteed" the right to defer the charge until the property changes hands. 

3. A household in the lowest proposed band (£2m-£3m) will only pay an extra £250 per month - the same as the average top band of council tax. Balls added that he would look at asking overseas owners of second homes in the UK to make "a larger contribution". 

But despite these clarifications, Labour's mayoral hopefuls retain concerns over the policy. A spokesman for David Lammy, the only officially declared candidate (with the exception of transport expert Christian Wolmar), told me that while he "welcomed" the changes announced by Balls, he felt it remained "a tax on London". Rather than a Treasury-imposed mansion tax, he would like the policy to be introduced by local councils in the form of higher bands, ensuring that the capital (which accounts for 86 per cent of the properties that would be affected) gets to keep the majority of the revenue raised. "If London has to pay more, London should get to keep more," a source said. Labour has pledged to use the £1.2bn it expects to raise from the tax to fund higher NHS spending. 

Meanwhile, Tessa Jowell also said that she "welcomed" Balls's announcement but that she remained concerned about the implementation of the policy and disliked the "mansion tax" label. 

She said: 

The fact that he has made two things clear, first the banding of liability, and the second that if you are a basic rate taxpayer then any liability is deferred until the property changes hands, is a welcome recognition of the anxiety that has been caused to thousands of people, some of whom I represent, who, by and large, are elderly and are living on pensions.

But let's stop calling it a 'mansion tax', these are not mansions, these are family homes that have accured in value. When people think of mansions they think of great big Scottish estates, or Cotswold estates, or whatever, this is a feature of the London housing market. These are people who do not think of their home as this fast appreciating capital estate but as their family home. They're the kind of people who open their house to the Labour Party, where we can have our garden party in the summer, or whenever's there's a space needed for something in the community, they tend to be the people who offer their houses for that. It's this sense of settlement in constituences like mine, which is so incredibly important. The reason I've been speaking out against this is that I did not want a situation to arise where these people felt helpless and anxious in ways that meant the only option open to them was to sell their homes.

I hope that Ed Balls's piece will reassure them. I think, however, this is going to be complicated to implement, it will be important that when the detailed implementation plan is published that there is plenty of discretion to deal with the really difficult cases. 

When I asked whether she now supported the policy, she told me: 

I don't think it's over yet. I think that what Ed has set out today is a welcome outline but as with all of these policies the test is in the implementation. I look forward to talking further with him about how this is implemented in order to prevent bad cases discrediting what is a policy intended to increase fairness. 

Update: Diane Abbott, another likely mayoral candidate, has tweeted: "My view on the mansion tax. Good idea in principle. But you cannot escape the fact that it is a tax on London."

Update 2: Margaret Hodge told me: "I think the detail Ed Balls has set out today is a step in the right direction, although I do have reservations about a mansion tax. Of course it cannot be right that you pay the same amount of council tax on a property worth £320,000 as one worth £3m. The challenge is finding a solution that is as fair and as effective as possible."

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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