Labour has attacked Knight Frank, a firm of estate agents, for sending out material to households highlighting the “threat” of a mansion tax before the election.
Sadiq Khan, the shadow London minister and shadow justice secretary, accused the firm of shocking “scaremongering”, arguing that it was an attempt by a private company to influence the results of the election.
Labour has pledged to impose a levy on all homes worth more than £2m to raise cash for the NHS, but some senior party figures, especially those in London, are uncomfortable about the plans. The Liberal Democrats prefer a different method that might involve extending the council tax system, while the Conservatives are opposed to a higher value property tax.
The Knight Frank letter does not urge voters to choose any particular party but suggests people may be thinking about their financial position with the election coming up, and includes a report setting out the possible implications for high-value house prices.
A letter sent to a voter in the marginal seat of Wandsworth read: “Ahead of the General Election on 7th May, you will no doubt be considering the implications of the result on your investments and assets.
“For those with a stake in the upper end of the housing market, the threat of a potential Mansion Tax is one obvious area of focus. We felt you would be interested in this particular issue and the attached insights from our Global Head of Research Liam Bailey.”
The report says: “[The] election result will determine the potential for the introduction of a Mansion Tax, or a variant. Anything other than a Labour majority government (current odds 8/1), a Labour/Liberal Democrat coalition (17/2) or a Labour/SNP coalition (6/1) is unlikely to lead to its introduction. The current odds on a Conservative majority are 5/1.”
Khan, who is considered a frontrunner to be Labour’s London mayoral candidate, said: “Estate agents are one of few professions trusted less than politicians, and I am shocked that Knight Frank think it is acceptable to scaremonger like this.”
He also said Knight Frank had made a £2,000 donation to a campaign run by Dorset Conservatives, registered by the Tory Cabinet Office minister, Oliver Letwin, before the last election, although that appears to be a one-off.
“It is simply wrong that a company that has donated to the Conservative Party are putting out misleading leaflets about Labour policy in marginal constituencies,” Khan said.
“The mansion tax is both fair and hugely popular with Londoners. Those with the broadest shoulders must bear the biggest burden and the mansion tax will ensure they do so. This comes down to a basic issue of fairness,” he added.
Khan said it was wrong for the estate agent to “patronise Londoners who are perfectly capable of deciding who to vote for themselves”.
Knight Frank said it was simply providing voters with a factual assessment of what the mansion tax would do.
“We’ve had lots of inquiries from clients and members of the public about what the mansion tax might mean for them,” Bailey said. “What we’ve put together is a document that tries to understand what the tax is and how it might work.”
He said it was not a political campaign and the estate agent was neutral on the idea of a proposed tax.
The Public Affairs Award 2014 shortlisted Knight Frank in the category of corporate campaign of the year for its “Campaign to stop the Mansion Tax”.
But asked whether Knight Frank is campaigning against the tax, Bailey said: “We’re well aware that we are not tax or political experts, but we’ve got a good vantage point of the market ... We’ve never taken a view on it because we are not campaign or political experts. What we’ve always been interested in is what these proposals mean for the market.”
