Cable welcomes Labour’s backing for mansion tax

It was welcome that Mr Miliband had “seen sense” and adopted the long-held Lib Dem plan for a one per cent levy on £2m-plus homes, he said, calling it “a policy whose time has come”.

But he said he suspected the Opposition would be unable to resist linking any Commons motion to its plans to revive the 10p income tax rate – scuppering any hope of a coalition-splitting vote.

Mr Cable also poured cold water on proposals being debated by his party to bring holiday home and buy-to-let landlords under the mansion tax or impose a wealth levy on possessions such as jewellery and paintings.

A party panel had produced some “wacky” ideas for the 2015 general election manifesto but they were “most emphatically not party policy” and were almost certain to be rejected by activists, he said.

Mr Miliband announced last week that his party backed the mansion tax as a way to fund the reintroduction of the 10p rate that was controversially scrapped by Gordon Brown.

While not a pledge for the 2015 general election, politically it attempted to outflank both coalition parties, with Chancellor George Osborne under some backbench Tory pressure to reintroduce the 10p rate in his Budget in March.

Liberal Democrats – backed by the respected Institute For Fiscal Studies think tank – argue that the Government’s policy of reducing tax for low earners by raising the threshold at which income tax is paid is a more effective measure.

“I’m glad they’ve seen sense... it is an idea whose time has come. I think the Labour Party are probably playing political games but nevertheless it’s welcome that they are endorsing it,” Mr Cable told the Murnaghan programme on Sky News.

Asked if the Lib Dems would accept Mr Miliband’s vote challenge, he said: “It depends entirely how they phrase it. If it is purely a statement of support for the principle of a mansion tax I’m sure my colleagues would want to support it.”

The party has been frustrated in efforts to persuade the Tories to adopt the policy.

“But very often in these opposition days they can’t resist the temptation to make party political point scoring and drag in other issues like the 10p rate and if that happens I am sure we will not.

“It is up to them to be statesmanlike and sensible.”

Mr Cable said he had first seen the tax proposals being put to the party’s spring conference in March in newspapers yesterday – despite the fact that they had been published on the party’s own website.

The internal policy consultation concluded there “may be merit” in imposing the one per cent levy instead on anyone with a land and property portfolio worth above the £2m threshold.

And it mooted a wider French-style wealth tax on assets such as jewellery and paintings.