Clegg wants Budget to target the rich

Lib Dems call for rich to pay mansion tax.

Nick Clegg is demanding a "tax the rich" Budget in March to head off growing fears that the Coalition will lose public support because its deficit-reduction programme is seen as unfair on ordinary families.

The Liberal Democrats are urging George Osborne to include a mansion tax on homes worth £2m and measures to stop the rich avoiding stamp duty when they sell their properties by transferring ownership to a shell company.

Although it is thought the Chancellor is unlikely to introduce a high-value property tax immediately, he may set up a review to look at raising the tax burden on the rich by targeting property assets rather than income, which would be harder to avoid. Mr Osborne is likely to act on stamp duty, amid evidence that rich people reduce the 5 per cent stamp duty on the sale of homes worth £1m to only 0.5 per cent by placing their property in a company.

Mr Clegg and other Liberal Democrat cabinet ministers will make their demands in behind-the-scenes talks with Mr Osborne before his Budget on 21 March. Other Liberal Democrat proposals include a tax on land values and scrapping the 40 per cent tax relief on pension contributions for higher-rate taxpayers. They also want a new crackdown on "non-domiciles" – foreign residents living in Britain who do not pay tax on their overseas earnings.

Today, Mr Clegg will join the debate about "responsible capitalism" before a speech on "moral markets" by David Cameron later this week. The Deputy Prime Minister will call for millions of workers to own shares in their companies in a new "John Lewis economy".

A source close to Mr Clegg said: "Nick is pushing his government colleagues for real, early, radical action on this. Employee ownership is part of a long liberal tradition."

Senior Liberal Democrats are worried public support for spending cuts could melt away unless the rich shoulder more of the burden.

Higher taxes for the rich are popular with the public and the Liberal Democrats do not want to be defined in the year ahead by their pro-European stance, which is not supported by a majority of voters. They believe the Tories might be persuaded to act on property values because opinion polls suggest they are seen by many voters as "a party for the rich" rather than "people like us." To increase the pressure on Mr Osborne, some Liberal Democrats plan to join Labour to try to bring in a mansion tax if it is not included in the Budget.

Lord Oakeshott of Seagrove Bay, a Liberal Democrat peer and close ally of the Business Secretary, Vince Cable, said: "A mansion tax is the real test of whether the Coalition means business on fair taxation. You can't claim 'we are all in it together' when wealth is virtually untaxed."

Start your day with The Independent, sign up for daily news emails
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk