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With Osborne ruling out a mansion tax, what will Clegg do on welfare reform?

By Paul Goodman
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George Osborne deals a double whammy to supporters of property taxes in the Mail on Sunday today:

  • Pow! "We are not going to have a mansion tax, or a new tax that is a percentage value of people’s properties".
  • Biff! New Council tax bands would be a "tax snoopers charter...You would have to send inspectors out and it wouldn’t raise much money. I’m not going to let the tax inspectors get their foot in the door."

His is the most vivid of the round of pre-conference interviews in today's papers because it is the most specific.  There's not much wriggle room in the quotes above.

I'm opposed to new annual taxes on property and believe that the Chancellor's announcement is good news.

However, it raises the question of what's been agreed with the Liberal Democrats about further welfare reform and public spending. Nick Clegg said at the party's recent conference:

"I will not accept a new wave of fiscal retrenchment, of belt tightening, without asking people at the top to make an additional contribution.  We have already illustrated through capital gains tax, through stamp duty, through tax avoidance and many other measures .  .  . the top ten per cent pay more and we can do more of that."

So the Chancellor has either a) pushed ahead with his announcement or b) squared it with Mr Clegg in advance.

I reckon the latter.  Mr Osborne will know that the price of the cut in the top income tax rate was the tarnishing of his claim that "we're all in it together".

It would be surprising if the autumn statement didn't at least have some suggestion in it of "the rich" paying more.

The routine of Danny Alexander claiming yet another clampdown on tax evasion - he does so before each yearly Liberal Democrat conference - is wearing thin.

I expect the Chancellor will find something else.  The interview also confirms that council tax will be frozen for the third year in a row, and rail fare rises will be limited to 4%.

11.45am Update: Looks as though I was on to something above, though it wasn't very hard to work out: see Paul Waugh's tweet below re today's Osborne interview on Murnaghan:

Screen shot 2012-10-07 at 11.43.43


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