Anyone earning over £50,500 would be considered fair game for a ‘wealth tax’, the Deputy Prime Minister Nick Clegg has said, which would probably take the form of reduced tax relief on pensions or changes to capital gains tax and stamp duty. And he reckoned his Conservative coalition partners would agree to the idea.
The Liberal Democrat leader told delegates at the party conference in Brighton that there was even growing support among Tories for the so-called mansion tax on homes that were worth several million pounds. This is something the Business Secretary Vince Cable has often spoken about but is seen by some as a tax on being a Tory. Also, houses valued at over £1m in today’s market are not usually ‘mansions’.
However, Clegg’s wealth tax call is said to be an attempt to justify he and Cable sanctioning further cuts to the welfare budget.
“We cannot of course make the welfare budget immune to further savings but we have got to ask people who are far better off to make a contribution,” the Lib Dem leader told the BBC. “Decent, fair minded folk who are earning far more than the national average understand that they do need to make a contribution because that’s what the nation demands right now.”
He added: “I will not accept a new wave of fiscal retrenchment without asking people at the top to make their contribution. I don’t think you can ask people on middle and low incomes to bear the brunt of this adjustment. The vast majority of people would think a salary of £60,000, £70,000, £80,000 is a considerable amount of money.”
On Tory support for the ‘mansion tax’, he said: “There are an increasing number of Conservatives who understand the value of having fairer tax on high value properties. I think there is a very good chance that we can make the top pay more tax.”
The Chancellor George Osborne – heavily criticised for scrapping the 50p top tax rate – is expected to ask for another £10bn of savings in the next Comprehensive Spending Review.