Not taking the bait: Lib Dems refuse to vote with Labour on mansion tax

Unsure which way to turn? Cable toyed with backing the Labour motion at the weekend.
Unsure which way to turn? Cable toyed with backing the Labour motion at the weekend.
Ian Dunt By

Liberal Democrats will hold back from supporting a Labour motion for a mansion tax today, as they stand against a policy they have promoted for several years.

The party was put in an impossible position after Labour specifically designed an opposition day motion on the policy to cause a rift in the coalition.

The Lib Dems tried to get out of the sticky situation by deciding to vote for an amendment expressing support for the mansion tax but accepting the Tories do not.

"This amendment allows Liberal Democrats in parliament to back our long-held policy of the mansion tax," Vince Cable said.


"We created it and we will continue to champion it.

"The amendment also makes clear that although we are in coalition with the Conservatives, we have different views on the desirability of the mansion tax. The Lib Dems, however, will not support a Labour motion designed exclusively to play cynical party games."

The business secretary has evidently had a change of heart since Sunday, when he toyed with the idea of backing the Labour motion.

Shadow Treasury minister Chris Leslie said the Lib Dem position was "astonishing".

He added: "The Lib Dems have a simple choice: either they back the policy they set out in their manifesto, and which Nick Clegg made the centrepiece of the Eastleigh by-election campaign, or they do not.

"No amount of wriggling or contortion can get them out of that simple choice."

Labour effectively stole the policy off the Lib Dems, changing almost none of the details found in the original Lib Dem proposal, including the value at which the tax would apply – on properties worth over £2 million.

The money from the policy would go towards setting up a new 10p bottom rate of income tax. Liberal Democrats are wary of that move, which they view as a distraction from their efforts to take lower earners out of income tax altogether.

Lib Dems have long promoted the policy but it has been categorically ruled out by chancellor George Osborne.

Today's amendment notes that "the part of the coalition led by the deputy prime minister (Nick Clegg)" advocates the idea while "the part of the coalition led by the prime minister does not".

Conservatives will also vote for the amendment, which sets out the tax policy supported by both parties without committing the coalition to a mansion tax after the election.

There are questions about whether the mansion tax would raise enough revenue to fund a 10p tax rate and also about how truly progressive it is.

In its response to the Labour announcement, the respected Institute for Fiscal Studies (IFS) said a mansion tax was a drop in the water compared the fundamental reform of council tax which many tax experts demanded.

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