Today, enter Vince Cable pursued by a mansion tax. In an interview with the Telegraph, the Business Secretary concedes that the 50p rate is not a permanent fiscal instrument, but its removal (after 2015 when the income tax threshold has been raised to £10,000) will require a concession from the Conservatives. He said:
‘My party has always accepted that at some stage [the 50p rate] will have to be dealt with…[but]…if the top tax rate was removed it would need to be replaced with something else — primarily something associated with wealth or high value property.’
The mansions tax has had a colourful past: it was introduced, dropped and then reinstated in a slightly different form in the run up to last year’s election. The proposal was not included in the coalition agreement, but that is a document recognised more in breach than adherence these days. Nick Clegg has since resuscitated the scheme and now Dr Cable is stalking in familiar territory once again. It seems likely that the Lib Dems will make the tax a demarcation point between them and the Conservatives. But regardless of how often the proposal is woven and spun, it always emerges in the same coarse condition, both politically and economically. Credibility, especially on economic matters, remains the Lib Dems’ most potent long-term weapon.