Coalition clashes over mansion tax

Deputy Prime Minister Nick Clegg and George Osborne have publicly clashed over tax policy ahead of the Chancellor's Budget next month.

The Liberal Democrat leader accused his Conservative coalition colleagues of blocking efforts to make the tax system "fairer" by imposing a levy on mansions.

He did not rule out joining with Labour MPs in a Commons vote calling for a "mansion tax" on properties worth more than £2 million.

The row came as Mr Clegg prepared to return to the campaign trail in Eastleigh, where the by-election triggered by Chris Huhne's resignation has forced the two coalition parties to go head-to-head in the battle to win votes on February 28.

A mansion tax has been championed by the Liberal Democrats and last week Labour leader Ed Miliband threw his weight behind the policy, which he said could pay for the reinstatement of the 10p lower rate of income tax scrapped by Gordon Brown.

Mr Osborne dismissed Labour's policy as a "con" which would see state inspectors assessing the value of homes across the country. He told ITV's The Agenda: "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 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."

Although Mr Osborne's criticism was directed at Labour, Mr Clegg responded with an attack on his coalition partners.

He told ITV News: "I for the life of me don't understand why the Conservatives think it's OK that an oligarch can buy a palace in Regent's Park for tens of millions of pounds and pay the same council tax as a three-bedroom family house in Lewisham. That is just unfair. We can't keep turning a blind eye to the super wealthy basically being taxed the same way on their properties as hard working families across the country."

He claimed that the Conservatives did not want to make the tax system fairer. "The Liberal Democrats have always been unambiguous that they want to make the tax system fairer. The Conservatives don't want to do that. They don't want, perhaps, to offend people in very large mansions. They need to answer for themselves. I'm absolutely sure that what we stand for is the right thing."

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