Tory donors are likely to pay millions under Labour's mansion tax

Labour accuses Tories of opposing tax to protect their donors

Andy McSmith@andymcsmith
Tuesday 06 October 2015 10:22

Dozens of the Conservative Party’s biggest donors stand to lose from Labour’s proposed mansion tax because their homes are valued at more than £2m.

The figures were complied by Labour, who say that the real reason the Conservatives oppose the tax is because they hope campaigning against it will bring in more big donations.

Michael Dugher, the Shadow Cabinet Office minister, has written to the Tory party chairman, Grant Shapps, alleging that there is a “suspicion that your party’s policy on the mansion tax is influenced by those you are courting to fund your election campaign”, and urging him to end the Tories’ opposition to the tax.

As well as hitting at least 33 big donors, the tax would also catch several prominent Conservatives, including Lynton Crosby. The Australian political strategist hired by David Cameron has a flat in Westminster valued at nearly £2.8m; and Andrey Borodin, a Russian oligarch who is believed to have used one of his companies to donate to the Tories, owns Park Place, near Henley-on-Thames, which he bought for £140m.

Labour have not said at what rate the tax would be set, but it is thought that it will be “banded” so that owners of higher value properties would pay a higher rate than those in a house worth £2m. But even if it were a flat rate 1 per cent on all properties, Mr Borodin would be liable for £1.4m a year.

Other potential big losers include Lisa Tchenguiz, who has a home in Mayfair worth more than £11.6m and has given the Tories £100,000. The American hedge-fund manager Yan Huo, who has given the Tories more than £67,000, has a London home worth more than £25m.

Mr Dugher said: “Is it any wonder the Tories stand up for the privileged few when they dine with exclusive, mansion-owning donors? David Cameron may think that everyday working people have £2m-plus homes, but in the real world people back Labour’s plan for a mansion tax to pay for doctors and nurses.”

The Labour Party has said that the mansion tax would raise more than £1.2bn, which would be invested in the NHS. It has been estimated that it would have to raise an average of £11,000 per affected household per year to achieve that figure. The Liberal Democrats also support a mansion tax.

An online poll by Survation, on behalf of the website LabourList, conducted after Ed Miliband’s speech to the Labour conference this week, showed that 72 per cent of respondents backed the mansion tax; only 12 per cent were opposed.

But some specialists have warned that it could force people on middle incomes living in parts of London where house prices have risen sharply to move out, making areas such as Kensington and Chelsea off limits to anyone but the super-rich. Kate Barker, a former member of the Bank of England Monetary Policy Committee told the Huffington Post that Labour’s prediction for how much the tax would raise was “wholly unrealistic” and it would be “very disruptive”.

A Tory spokesman said: “We all know what Labour is proposing is a homes tax that will hit tens of thousands of ordinary people … Labour’s own MPs have suggested it could affect homes worth as little as £400,000.”

Top Tory donors: Who gave what

Michael Farmer: Hedge-fund manager, worth £155m; given £6m. Home in South Kensington valued at £9.4m.

Sir Michael Hintze: Hedge-fund manager, estimated fortune of over £1bn; given more than £3m. House by Clapham Common worth nearly £4.9m.

Georg von Opel: Estimated fortune of £1.2bn; given £333,000. Chelsea home worth £27.4m.

Lubov Chernukhin: Banker; paid £160,000 for tennis with PM and Boris Johnson. £4.6m home in Chelsea.

Lisa Tchenguiz: Film producer; given £100,000. Mayfair home worth more than £11.6m.

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