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Why LibDems are dishonest in opposing Mansion Tax


6:40 pm - March 11th 2013

by Sunny Hundal    


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The Lib Dems have flip-flopped, again. Recently we revealed that Labour were planning to bend over backwards to get Lib Dem support on the Mansion Tax and put pressure on the Conservatives to introduce it.

Today Vince Cable released a statement saying, “Liberal Democrats will not support a Labour motion designed exclusively to play cynical party political games.”

This is dishonest for two reasons.

Firstly, the wording was out last week so Vince Cable could have said then whether a motion itself was the problem or how it was phrased. And yet, Vince Cable kept maintaining, until this morning, that he would look at the wording and judge it on its own merit.

Secondly: Cable back-tracked not because of the motion, but because Downing Street put pressure on him. This morning they said:

The prime minister will expect, as always, government ministers to support the government in all votes.

Vince Cable and Nick Clegg would have know this earlier, and yet they’re trying to place the blame on Labour for their decision not to support Labour.

A source from Ed Miliband’s office told me the Lib Dems “seem to be in a confused and contradictory position”.

Update The Lib Dem flip-flop is even more pronounced than I realised.

» Earlier today Vince Cable told the Today programme, Vince Cable was asked about Labour’s motion he said: “if it is a real commitment, I would certainly welcome that.”

» On 17 February, Vince Cable said of Labour’s motion: “It depends entirely how they phrase it. If it is purely a statement of support for the principle of a mansion tax I’m sure my colleagues would want to support it.”

» Asked on yesterday’s Sunday Politics which part of the Labour motion he disagreed with Lib Dem party president, Tim Farron said: “none of it”.

» On BBC2’s Daily Politics today Lib Dem MP Stephen Williams said of the Labour motion: “I could have written it myself”.

» On 14 February, Lord Oakeshott told Newsnight: “If they [Labour] move a core Liberal Democrat flagship policy like that why wouldn’t Liberal Democrat MPs support it, are they doing political posturing or is this for real?”

FLIP-FLOP.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


This was always going to be the outcome & it surprises me that you find it surprising !

The Spectator covered it at the weekend and even mentioned that the tories have written an amendment that the LDs agreed to & they just hope that the Speaker calls it.

I wouldn’t trust the LDs to tell me the sun was shining without looking out of the window to check.

A Labour source, who may directly or indirectly have something to gain in trying to show up the Lib Dems, say they’re confused and contradictory? Well that’s authoritative!

The reality is that regardless of how good the intentions of Labour may be (that’s ok, you can stop laughing now guys), Lib Dems making an active choice to a) oppose the current government policy, b) try to force Osborne’s hand so close to the budget, and/or c) create tension in the cabinet and back benches on the issue would be something that they quite rightly may not wish to take a risk on.

This isn’t about content, or principles, or indeed anything that matters in the grand scheme of things for ordinary people. This is the Lib Dems being put on the spot by Labour and doing the quite natural thing of going back to their partners when someone from outside sticks their nose in on the relationship.

Now, I don’t believe that really the Lib Dems would suffer in public opinion if they did support the motion, but they sure as hell would suffer behind the scenes.

The obvious problems with those reasons are:

1. The timing was part of Labour’s “cynical party political games”. It is perfectly consistent that Cable would wait until after his conference to respond. Unless you are suggesting Labour doesn’t ever play political games (and you’ve never struck me as being stupid), it makes no sense to suggest that someone wary of a political trap should blindly follow the timing of the party setting the trap.

2. Well, again, you’ve never struck me as stupid, but you really don’t seem to have thought this through. The trap being set was that Cable should either challenge his coalition partner on something that wouldn’t make it through Parliament at this time and therefore fail, or go back on his own policy and therefore fail. The only way to win that game is not to play. The fact that the Tories said exactly what you would expect is pretty much irrelevant.

Unless you honestly think that the targets of deeply cynical gambits must operate to the timetable of the party setting the trap,

then you’ve really made no case at all that Cable is being dishonest.

Oh, and the press release from Labour could have been written at the same time as the motion. All utterly predictable.

Labour currently have no policies. You surely don’t think they happen to have suddenly found one, which just so happens to be a Lib Dem one, is honest and sincere politics? Because there’s absolutely no evidence they made any attempt to work with the Lib Dems to get their first policy idea in a long time through the system.

(in two posts due to a “hit submit” error)

They are in government and the mansion tax is not government policy. That’s the way coalition politics the world over works for better or worse

Lee Griffin – look at the quotes – they clearly show Libdems flip-flopping

7. Jim Hutchon (@DopeyJim)

There was no way the Lib Dems were going to fall for Labour’s puerile ‘tee-hee’ games. But their response was totally boring. They could have found a wrecking amendment that blew the silly ‘joke’ out of the water and given themselves some credit for imagination at the same time. But the losers are Labour, who have shown themselves up as an irresponsible gang of hooligans.

I’m not entirely sure how opposition day motions work in the House of Commons, but surely the Lib Dems will propose their amendment, it will pass with a majority with both Conservative and Lib Dems voting for it, and then Labour will be the ones voting against the final text of the motion?

Here is the amendment to the motion that the Lib Dems say they will propose:

> Line 1, leave out from House to end, and insert:

> ‘This House notes that this Coalition Government has cut income tax for 25 million people, taking over 2.2 million low income individuals out of income tax altogether, while at the same time increasing taxes on the wealthy, including raising stamp duty on expensive properties and restricting tax reliefs; further notes that both parts of the Coalition continue to support tax cuts for people on low and middle incomes; notes the part of the Coalition led by the Deputy Prime Minister also advocates a Mansion Tax on properties worth more than £2million, as set out in his party’s manifesto, and the part of the Coalition led by the Prime Minister does not advocate a Mansion Tax; further notes that the top rate of tax will be higher under this Government than under any year of the previous administration and that the rich are now paying higher percentage of income tax than at any time under the previous administration, demonstrating that it presided over an unfair tax system where the rich paid less and the poor paid more in tax than now, meaning nobody will trust the Opposition’s promises on tax fairness.’

Reason number 24821 why party politics makes people stupid.

Oh for a parliament where MPs vote on motions based upon what they think about the ideas being expressed rather than party posturing.

The Mansion Tax is absurd and indefensible. If people want to spend their earnings – which they have already paid tax on, on a £2M house, that is up to them. It doesn’t give any government the right to try and lean on them for more money.

The only way this would be principled (though still stupid) would be also to do inventories of the possessions people have inside (and outside) their homes and tax them again (every year) on those. (Thus in theory the owner of a small house packed with very expensive goods might logically pay more than the owner of a large but cheaply furnished mansion.)

How many people would be up for that? None.

And I say the above as someone who doesn’t own a home and has no reasonable prospect of ever owning one, certainly not a £2M one.

Taxing people on what they’ve already been taxed on isn’t fair, it’s a form of extortion. And it doesn’t make it right just because it’s happening to other people than oneself.

Tax earnings and spending, not what is rightfully the property – be it furniture, clothes, electronic goods or the tiles on the roof – of ordinary individuals after that.

In any case, the economy is not going to revive by more and more ingenious taxing or cutting at any point in society. It can only mainly come from a revival in business fortunes. Faciliating that ought to be the priority of any government. This sort of gesture politics may gain votes but it’s economically nonsensical – and as has been implicitly admitted on this site by one of the advocates, it’s driven not by economic logic but rather by mere spite.

11. MarkAustin

@10. Lamia

This is an argument for the abolition of all property taxes, not against the Mansion Tax.

Yes, a case for this can be made, and the point about double taxation is valid. But it isn’t going to happen any time soon.

So, the thing is: make the sytem fair(er). The proper way to do it is a revaluation accompanied by the addition of 2-4 more bands, but this isn’t going to happen either. There will be too many screams from the handful of losers in a revaluation.

Given the currect farce where someone in a £2,000,000 house in, for example Westminster pays the same as a (band H) property worth £320,000, it at least addresses the problem.

They are Lib Dems, they dont have principles, they just do whatever their Tory bosses tell them

13. Churm Rincewind

@ 10 Lamia – “Taxing people on what they’ve already been taxed on isn’t fair, it’s a form of extortion.”

I don’t quite follow this line of argument. Everyone’s income is taxed, one way or another. Subsequently, when people spend their already taxed income, further tax is payable by way of VAT – i.e. (as you put it) they’re being taxed on what they’ve already been taxed on.

Are you saying that VAT (for example) is unfair?

14. Witchsmeller Pursuivant

@ 13 Churm – you are misrepresenting Lamia’s argument.

when people spend their already taxed income, further tax is payable by way of VAT – i.e. (as you put it) they’re being taxed on what they’ve already been taxed on.

Yes, and when people purchase property they are taxed via Stamp Duty (which is analogous to VAT). If they make unearned gains they are subject to Capital Gains Tax.

Are you saying that VAT (for example) is unfair?

No, but taxing people again, AFTER they’ve made their purchase, would be; imagine buying a pair of Raybans out of your taxed income, paying VAT on the purchase, and then being hit every year thereafter by the Designer Sunglasses Tax, simply because you own a pair.

15. Churm Rincewind

@ 14 Witchsmeller – I’m still lost. Lamia’s argument, as I understand it, is that it’s unfair to tax people on what they’ve already been taxed on. I gave the example of VAT as being a tax on taxed income; you say that “when people purchase property they are taxed via Stamp Duty (which is analogous to VAT). If they make unearned gains they are subject to Capital Gains Tax.” I agree. These are further examples of tax on already taxed income (there are many others). So do I take it that your view is that such taxes are not extortionate, as Lamia claims?

You then seem to suggest that taxing people again, AFTER they’ve made their purchase, would be indeed be extortionate, your example being “buying a pair of Raybans out of your taxed income, paying VAT on the purchase, and then being hit every year thereafter by the Designer Sunglasses Tax, simply because you own a pair.” Isn’t that how Council Tax operates – i.e. we get hit every year after the initial purchase of a property, and after paying tax on the transaction, simply because we own it? Are you saying that on those grounds you see Council Tax as a form of extortion?

16. Witchsmeller Pursuivant

Council Tax, although linked to the notional value of property, is predicated on the use of Council services; police, fire services, rubbish collection etc. So although it is, in some effects a property tax, it’s a half-hearted one, a modified poll tax.

The Mansion tax appears to have no similar justification, it’s simply a tax on wealth.

In answer to your question as to whether I see Council Tax, Mansion Tax, VAT etc as forms of extortion, then no, I don’t. I see them as some of the costs of existing in this society. However, I do view some taxes as more iniquitous than others.

17. Churm Rincewind

@ 16 – “I do view some taxes as more iniquitous than others” I’m with you there.

My basic problem with the Mansion tax is that it seems to be absolutely identical to Council Tax – that is, it’s a tax based on the (supposed) value of a property. So it could easily be implemented by creating a new Council Tax band for properties valued at over £2 million, or whatever.

The only difference as far as I can tell is that, as you quite rightly point out, revenues from Council Tax flow to local authorities, whereas revenues from a Mansion Tax will flow to central Government.

Which, in my view, is quite simply unjustifiable.

@ Churm,

Witchsmeller Pursuivant has clarified exactly what I think. Council Tax can at least be justifiable in that it is to pay for services. I don’t mind or disagree with the idea that those best able to pay more do so.

Adding a yearly tax simply because you fancy a bit of someone’s wealth on top of what they’ve already paid is another matter, however. The Rayban Tax is the correct analogy in this instance. you pay your income tax, then the VAT on the suglasses. How much more times can you reaonably be expected to pay. It’s why I’m also against taxing people’s saved interest on money they’ve already paid income tax on.

Obviously taxes need to be paid, and they should be progressive. One can take it too far, though. Our savings and property, however much we have, should not just be treated as a limitless cash-cow for government. And I repeat, I say that as someone who does not own, or ever has owned, or is ever likely to be able to buy even a small house of my own, let alone a mansion.


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