Osborne: mansion tax makes "no economic sense"

Chancellor George Osborne has signalled the coalition would have “no truck” with a tax on high-value properties, as it would destroy jobs and make “no economic sense”.

In a keynote address to the Conservative conference in Birmingham, Osborne made clear his disapproval of the idea.

“It would be sold as a Mansion Tax. But once the tax inspector had his foot in the door you’d soon find most homes in the country labelled a ‘mansion’. Homes people have worked hard to afford and already paid taxes on.”

“It’s not a Mansion Tax it’s a Homes Tax and this Party of home ownership will have no truck with it” he said.

He also hinted that employers could be able to buy shares in their companies if they give up their employment rights. Additionally, Osborne said a consultation would be launched to see shares being exempt from capital gains tax.

“Workers: replace your old rights of unfair dismissal and redundancy with new rights of ownership. And what will the Government do? We’ll charge no capital gains tax at all on the profit you make on your shares,” he said.

“Zero percent capital gains tax for these new employee-owners. Get shares and become owners of the company you work for. Owners, workers, and the taxman, all in it together. Workers of the world unite.”

He hailed the plan, which would be voluntary for employees and firms, as a “radical change to employment law”.

Osborne also pledged to cut a further £10bn from the welfare budget by 2016, as a necessary step to meet his own fiscal targets. He suggested that the government could cut housing benefit for unemployed under-25s and bring in reductions to child tax credits to help meet the target.  

However, deputy prime minister Nick Clegg cast Osborne’s plans into doubt as he told BBC news this afternoon that while the Conservatives were “entitled to settle out their stall”, but “nothing has been agreed”.

 “My attitude has always been very simple, very straightforward, which is that as we have to make more savings as a country – as we do – you start at the [top] and work your way down, not the other way around.

“Nothing has been agreed within government on the detail of any further changes; these are the kind of things that we will thrash out within government in the months ahead” he said.