Chancellor may still give go-ahead for 'tycoon tax'

Clegg pushes Osborne to back his tax on super-rich

George Osborne is seriously considering the "tycoon tax" proposed by Nick Clegg as he finalises the Budget he will deliver a week today.

But the Chancellor has rebuffed the Liberal Democrats' calls for a mansion tax on homes worth more than £2m after David Cameron insisted that the Government should not bring in a new tax. Instead, Treasury officials are examining a proposal by Mr Clegg for all taxpayers to pay a minimum rate of tax, probably 20 per cent – in line with the basic income tax rate.

The Liberal Democrat leader is angry that many millionaires pay a lower proportion of income tax than ordinary workers by employing advisers to help them exploit tax loopholes.

Mr Osborne will use next Wednesday's Budget to announce plans to take out loans that would not be repaid for 100 years or more. He will launch a consultation exercise to test the demand for "super-gilts" or even "perpetual gilts" on which the capital is never repaid but interest is charged forever.

The proposal means that children not even born yet would, as taxpayers, pay the interest throughout their lives on debts built up in the 2008 financial crisis. But the Chancellor believes his surprise move will help future generations by "locking in" low interest rates on a proportion of the national debt.

The UK already issues long-term bonds of up to 50 years, although two, five and 10-year gilts are more common. The last "perpetual gilts" were issued at the end of the First World War.

A Treasury source said: "This is about locking in for the future the tangible benefits of the safe haven status we have today. The prize is lower debt interest payments for taxpayers for decades to come. It is a chance for our great grandchildren to pay less than they otherwise could have expected to thanks to this Government's fiscal credibility."

Mr Clegg floated the idea of a "tycoon tax" at the weekend but it appeared to have been shot down by critics in his own party and scepticism at the Treasury. However, the issue was discussed on Monday by the Coalition's key decision-making body, the Quad: Mr Cameron, Mr Osborne, Mr Clegg and Danny Alexander.

"A minimum tax rate is still on the table," one Whitehall source said yesterday. Mr Clegg is said by colleagues to be confident of seeing some progress on his idea in the Budget. One option is for Mr Osborne to announce a study into whether a "tycoon tax" would work in Britain. But Mr Clegg is pressing the Chancellor to go further – for example, by announcing his backing for the idea in principle so that it could be introduced next year or the year after.

Mr Osborne will announce a crackdown on wealthy owners of expensive homes in London who avoid paying full stamp duty by putting the ownership in companies, sometimes based offshore. He is also expected to bow to Liberal Democrat pressure to speed up the raising of the personal tax allowance towards the Coalition's £10,000 goal.

Tory MPs hope Mr Clegg will, in return, allow Mr Osborne to announce plans to abolish the 50p top rate of tax on incomes over £150,000 a year.

Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' embraces politics, religion, warfare, courage, love and loyalty, say creators
Sport
Sergio Romero saves Wesley Sneijder's penalty
world cup 2014But after defeating the Dutch, Lionel Messi and Argentina will walk out at the Maracana on Sunday as underdogs against Germany
Sport
Scoreboard at the end of the semi-final World Cup match between Brazil and Germany at The Mineirao Stadium in Belo Horizonte
Sport
'Saddest man in Brazil' takes defeat with good grace, handing replica trophy to German fans
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleThe Game of Thrones author said speculation about his health and death was 'offensive'
Arts and Entertainment
Martin Freeman and Lauren O'Neil in Jamie Lloyd's Richard III
theatreReview: The monarch's malign magnetism and diabolic effrontery aren’t felt
News
Glamour magazine hosts a yoga class with Yogalosophy author Mandy Ingber on June 10, 2013 in New York City.
newsFather Padraig O'Baoill said the exercise was 'unsavoury' in a weekly parish newsletter
Extras
indybest
News
people'She is unstoppable', says Jean Paul Gaultier at Paris show
Sport
Alexis Sanchez and apparently his barber Carlos Moles in Barcelona today
football
Arts and Entertainment
Miley Cyrus has her magic LSD brain stolen in this crazy video produced with The Flaming Lips
video
Arts and Entertainment
In his own words: Oscar Wilde in 1882
theatreNew play by the Oscar Wilde's grandson reveals what the Irish wit said at his trials - and what they reveal about the man
News
people
Arts and Entertainment
Unless films such as Guardians of the Galaxy, pictured, can buck the trend, this summer could be the first in 13 years that not a single Hollywood blockbuster takes $300m
filmWith US films earning record-breaking amounts at the Chinese box office, Hollywood is more than happy to take its lead from its new-found Asian audience
News
The garage was up for sale in Canning Place Mews for £500,000
newsGarage for sale for £500,000
Life and Style
tech
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Mobile App/IOS Developer (C#, ASP.NET, .NET, MVC)

£50000 - £60000 per annum + Benefits + Bonus: Harrington Starr: Mobile App/IOS...

Front End Developer-JavaScript, Angular J.S, HTML, CSS, ASP.NET

£40000 - £45000 per annum + Benefits + Bonus: Harrington Starr: Front End Deve...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Day In a Page

The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil