Clegg vows to push for mansion tax

Nick Clegg wants the 10,000 pounds personal tax allowance introduced earlier than planned

Published: 3:54am, 26th January 2012
Updated: 8:42pm, 26th January 2012

Nick Clegg has pledged to push for the introduction of a mansion tax as he demanded faster cuts for taxes on low and middle-income earners.

The Deputy Prime Minister is urging George Osborne to introduce a £10,000 personal allowance on income tax more quickly than planned to relieve the growing pressure on household budgets.

He said that the coalition agreement to raise the threshold gradually over the course of the parliament is no longer enough when family finances are facing a "state of emergency".

Mr Clegg, along with Chief Secretary to the Treasury Danny Alexander, will be lobbying the Chancellor ahead of his March Budget for reforms to make the tax system "fairer".

Among the measures he is pushing for is the introduction of a mansion tax, the Lib Dem leader said. The controversial proposal would impose a levy on properties valued at more than £2 million.

In a speech to the Resolution Foundation think tank, Mr Clegg said: "I know the mansion tax is controversial, but who honestly believes it is right that an oligarch pays just double the council tax of an average homeowner even if their house is worth 100 times as much?

"And who seriously thinks we would kill aspiration through a levy on the 0.1% of the population who own £2 million homes? The mansion tax is right, it makes sense and the Liberal Democrats will continue to make the case for it. We're going to stick to our guns."

In a challenge to his Conservative coalition partners, the Deputy Prime Minister said: "The UK's tax system cannot go on like this, with those at the top claiming the reliefs, enjoying the allowances, paying other people to find the loopholes, while everyone else pays through the nose. This is about fairness in the middle. More money in the pockets of the people who need it."

Raising the income tax personal allowance to £10,000 was a Lib Dem manifesto commitment and endorsed in the Coalition Agreement after the 2010 general election. The first increase in the allowance, from £6,475 to £7,475, was announced in the 2010 Budget. It is set to rise again, to £8,105, in April.

Labour leader Ed Miliband said: "Finally Nick Clegg has woken up to the squeezing of people on middle incomes, but the problem is who squeezed the middle? It is this Government that has put up VAT, this Government that is cutting tax credits and this Government that is allowing energy companies to rip people off on their bills. I don't think people are going to trust Nick Clegg or this Government to help the squeezed middle."