Mansion levy will allow poorest to pay no income tax

Tensions in coalition as, weeks before the Budget, Lib Dems demand £16bn in tax rises for the rich

The Treasury is being asked to consider a £16bn package of tax rises on the wealthy to pay for the bulk of an income tax exemption for anyone on the minimum wage.

The proposal, to be formally adopted as Liberal Democrat policy within weeks, includes ending pension reliefs, shutting stamp-duty loopholes and imposing a mansion tax on properties worth £2m or more. In a dramatic escalation of tensions between the coalition parties, the measures target the wealthiest in order to fast-track the key Lib Dem manifesto pledge to raise the income tax threshold to £10,000. Conservatives are likely to be infuriated by the demands, just weeks ahead of the Budget.

The public appears split on the issue of tax. In a new IoS/ComRes poll, 37 per cent of people said George Osborne, the Chancellor, should make tax cuts a priority in the Budget, but 41 per cent said cuts should wait until the economy has recovered. More than half of Lib Dems (52 per cent) and 38 per cent of Tories back the idea of raising the 50p tax rate for those earning over £150,000 to 60p.

In the poll of voting intentions, the Conservatives are on 39 per cent, ahead of Labour on 38, the first Tory lead in a ComRes survey since October 2010. Almost half (49 per cent) believe the PM is out of touch, a third think he talks down to people and just 12 per cent say he is good on policy detail.

The Lib Dems are on 10 per cent, even after stepping up "differentiation" from their coalition partners.

From 1 April, the income-tax threshold will rise to £8,105. Mr Osborne is under pressure to use the Budget on 21 March to unveil an increase for 2013, perhaps as high as £9,000.

This week the Lib Dems will mount a major campaign to persuade Mr Osborne to agree to a sharp increase in the allowance. Simon Hughes, the party's deputy leader, has urged all members and activists to back an e-petition calling for the Government to go further and faster. David Laws returns to the political front line on BBC2's Newsnight, and Nick Clegg, the Lib Dem leader, will use a party political broadcast on Wednesday to demand "faster tax cuts funded by increasing the amount paid by the richest".

At the Lib Dem spring conference in Gateshead next month, delegates are expected to adopt a hard-line policy on ultimately lifting all minimum-wage earners out of tax altogether, by raising the threshold to £11,860. To do so would cost £18bn, according to party estimates seen by The IoS.

A motion will call for a list of "immediate steps to ensure wealthy individuals and businesses pay their fair share", including imposing a 1 per cent annual levy on homes costing more than £2m, which could raise £1.7bn. A general anti-avoidance rule – expected in the Budget – could net the Treasury £1.4bn; limiting pension tax relief £7bn; a stamp-duty avoidance clampdown £750m; a global financial transaction tax £4.4bn; and targeting non-doms who have been in Britain for seven of the past 10 years would garner £1.3bn, giving a total take of about £16.5bn, according to Lib Dem figures.

Labour yesterday claimed benefit and tax changes in April will leave families with children £580 worse off, on average.

Also in the poll, 71 per cent of people oppose bonuses for public-sector workers who earn more than £40,000. It comes after The IoS revealed payouts this year had topped £100m for Whitehall mandarins.

And 71 per cent believe the Government should ignore the ruling of the European Court of Human Rights and deport the Islamist cleric Abu Qatada to Jordan immediately.

ComRes interviewed 2,014 adults online on 15 and 16 February. Full tables at comres.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Pricing Analyst

    £30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

    £21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

    Ashdown Group: Head of Client Services - City of London, Old Street

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

    Why Mohammed Emwazi chose Isis

    His friends were betrayed and killed by al-Shabaab
    'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

    Open letter to David Cameron

    Building the walls of fortress Europe has had deadly results
    Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

    You don't say!

    Tory candidates' election tweets not as 'spontaneous' as they appear
    Mubi: Netflix for people who want to stop just watching trash

    So what is Mubi?

    Netflix for people who want to stop just watching trash all the time
    The impossible job: how to follow Kevin Spacey?

    The hardest job in theatre?

    How to follow Kevin Spacey
    Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

    Armenian genocide and the 'good Turks'

    To continue to deny the truth of this mass human cruelty is close to a criminal lie
    Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

    'Lou needed care, but what he got was ECT'

    The truth about the singer's upbringing beyond
    Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

    This human tragedy has been brewing for years

    EU states can't say they were not warned
    Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

    Women's sportswear

    From tackling a marathon to a jog in the park, the right kit can help
    Hillary Clinton's outfits will be as important as her policies in her presidential bid

    Clinton's clothes

    Like it or not, her outfits will be as important as her policies
    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders