Labour Think Tank Calls for Mansion Tax and Employment Surcharge to Fund Public Transport

Strategic Insights -

A report from Labour Together, a think tank founded by Sir Keir Starmer's chief of staff Morgan McSweeney, has suggested that wealthy areas should be taxed to pay for public transport projects. The group recommends that mayors such as Sadiq Khan be given new powers to target valuable properties with a new proportional tax, as well as the ability to levy small payroll taxes and increase council tax.

The report argues that giving wealthy urban areas more tax-raising powers would free them up to pay for public transport improvements, allowing more central government cash to be funnelled towards infrastructure projects in poorer communities. The think tank also calls for a windfall tax on developers and for big cities to be allowed to set up development corporations to raise their own money on the markets for infrastructure improvements.

The Chancellor, Rachel Reeves, is considering several property taxes to fill a £50bn black hole in the public finances, including a mansion tax on homes worth over £2m and an annual levy on properties valued at over £500,000.

Key Takeaways:

  • Labour Together recommends a new proportional tax on property values above a certain threshold for mayors to fund public transport improvements.
  • The think tank suggests local councils be given the power to levy small payroll taxes and increase council tax.
  • The report argues that wealthy urban areas should be taxed to fund public transport improvements, freeing up central government funding for infrastructure projects in poorer communities.
  • The think tank calls for a windfall tax on developers and for big cities to be allowed to set up development corporations to raise their own money on the markets for infrastructure improvements.
  • The Chancellor, Rachel Reeves, is considering a mansion tax and annual levy on properties valued at over £500,000 to fill a £50bn black hole in the public finances.
  • Labour Together was founded by Morgan McSweeney, the powerful No. 10 chief of staff, and has close ties to the Prime Minister and Chancellor.

Statistics:

  • £50bn: The estimated black hole in the public finances that the Chancellor, Rachel Reeves, aims to fill with property taxes.
  • £2m: The threshold for homes to be subject to a mansion tax.
  • £500,000: The threshold for properties to be subject to an annual levy.
  • £6bn: The annual revenue raised by a three per cent tax on gross salaries in Paris.

Sources:

  • Labour Together Report (no date)
  • "Mayors 'should be given new powers to tax wealthy properties' to fund public transport"
  • The Telegraph (no date)
  • "Reeves urged to introduce 'small payroll taxes' for local councils to fund transport"
  • The Telegraph (no date)