The Horsell's Mouth Politics, pedantry and personal interests

The nation's favourite bean-counter - pity his idealogy isn't as good as his maths

I wouldn’t like to buy a mansion from the Liberal Democrats because they only seem to price them in increments of £1million. Back in conference season, just after Nick Clegg promised “savage cuts” to assauge the thirst of the Orange Book brigade, the nation’s favourite economist Vince Cable stepped forward with a plan to surcharge people with homes worth more than £1million 0.5% of the value above the £1m threshold.

Unfortunately, the Liberals forgot that, somehow, they hold seats in places likes Winchester, Lewes, Oxford West and Abingdon, Richmond and Kingston. Many of the MPs in those areas, almost all of whom face a serious Conservative challenge at the next election, came forward to say that they didn’t like the policy much. Today, Nick Clegg made appearances on a number of popular news outlets announcing a re-think. Otherwise known as an admission that the policy was a silly idea.

Instead, they are going to charge people with homes worth more than £2million a whole 1% in tax above the £2m threshold. I can’t think of many people in Woking with houses worth that much, although I know there are a very few. This copious nonsense of a policy will affect just 70,000 households in the UK and raise just £1.7billion a year. Not only is this a paltry sum compared with the £175bn the government will borrow over the next two years but Mr Clegg is not even proposing to use this money to pay off the debt.

Instead it is part of a muddled package to increase the income tax allowance to £10,000 taking four million people out of income tax - but also giving £700 to every taxpayer, including the super-earners, each year. To counteract this, he wants to reduce the tax relief on pensions for higher earners. Fine. If you want higher taxes for the rich, you can try – but you’ll always end up paying more to get the money from them than you’ll recover in tax, which is why the 50% tax band is nothing more than classist posturing. The best way to raise the tax take is to solve our economic problems, get business booming and increase people’s incomes. When they earn more money, they pay more tax.

So not for the first time, the Lib Dems have a credibility gap on tax. I understand they want the rich to pay proportionally more tax. Yes, so do I. But the way to do that is not to single out the rich, or even “super-rich” for special treatment because wealth has its own way of avoiding penalty. You have to engage the economy, make everyone richer and give the rich a reason to stay in the country - a favourable business and earning environment – to contribute a fair share. I don’t think that 50% is too high a figure – but doing it as Labour have done will not produce anything.

Nor this shambles of a Lib Dem policy on mansions. Nick Clegg says that the changearound is not a U-turn and that the policy does “exactly what it says on the tin“. To me, the tin appears to be saying that the Lib Dems have very little idea how to get the government’s revenues flowing again.