18/02/2013 16:14 GMT | Updated 18/02/2013 17:02 GMT

Chancellor George Osborne Attacks Mansion Tax As A 'Con'

Chancellor George Osborne dismissed Labour's tax plans as a "con" which would see state inspectors assessing people's homes.

Labour leader Ed Miliband last week announced proposals to bring back the 10p lower rate of income tax which was scrapped by Gordon Brown, funded by a levy on homes worth more than £2 million.

George Osborne claimed Labour didn't 'understand aspiration' in the UK

But Osborne said the coalition government's policy of raising the income tax threshold was a fairer way of helping the low paid and claimed Labour's "mansion tax" would end up being extended to more modest properties.

He told ITV's The Agenda: "It's very costly to implement. It means you have to send inspectors round the country valuing all the homes - not just the homes worth over £2m but those worth less."

The chancellor said there were not enough "mansions" to cover the cost of a tax cut for millions of people.


"So either it's a tax con and the money comes from somewhere else or it's soon a homes tax and they say it's a mansion tax before the election and then very quickly (it) becomes a homes tax on many people who are not living in mansions at all."

Osborne claimed that "the inspectors get their foot in the door" and then "after the election suddenly it's everyone's homes that are potentially a target and Labour will have created a new tax".

The chancellor added: "It's just another thing that proves that I don't think they understand aspiration in this country."

Osborne acknowledged that the rich should be expected to pay more, but fairness in the tax system also meant allowing working people to "get on".

He said: "In a time like this you expect the rich to pay more and actually we are forcing the rich to pay more and indeed cracking down on those who don't pay their taxes but fairness is also about having a system where people who work hard and get on can get on in our society, fairness is about a welfare system that doesn't pay for people to stay at home.

"Fairness is quite a broad concept and people feel the system's unfair but I don't think this kind of tax con is a solution to that."

Deputy prime minister Nick Clegg, whose Liberal Democrats back a mansion tax, also rejected Miliband's proposals as a "pale imitation" of his own party's policies.

Miliband hopes to split the coalition with a Commons vote forcing the Lib Dems to choose between backing a mansion tax or maintaining unity with the Tories.

But in a keynote speech in the City of London Clegg said: "All we've got from Ed Miliband last week is some blatant plagiarism of Liberal Democrat ideas and still no remorse for the biggest economic meltdown in modern times.

"Labour cannot be taken seriously until its leaders apologise for the economic mess they created, apologise for the unfair tax system they left behind, and apologise for letting tax avoidance rip."

Labour vice chair Michael Dugher said: "Nick Clegg is a poster boy for a politician who breaks his promises and fails to deliver. Clegg and the Lib Dems will be judged for what they do, not what they say - and they are complicit in the Tory record of failure.

"The Lib Dems are cutting taxes for millionaires while millions of families are asked to pay more, seeing their living standards decline, wages failing to keep pace with inflation and cuts to their tax credits.

"Labour will vote in Parliament for a mansion tax. In government Labour wants to use this to pay for a reinstated 10p tax rate for low and middle earners.

"Nobody will take a word Nick Clegg says seriously as long as Lib Dems continue back this Tory-led government with all its unfairness and failing economic policies."

Shadow Treasury financial secretary Chris Leslie said: "It's laughable for George Osborne to claim his policies are fair when he's giving a huge tax cut to millionaires while forcing millions on middle and low incomes to pay more.

"Labour wants action now to kick-start our flatlining economy and help people struggling with the rising cost of living.

"George Osborne should back Labour's plan for a new lower 10p rate of tax paid for by a mansion tax on homes worth over £2m. This would be fair, help 25m working people on middle and low incomes and boost spending power in the economy."