Extra council tax bands 'fair'

Liberal Democrat plans for extra council tax bands covering high-value properties will be seen as "quite fair" by those in homes worth more than £2 million forced to pay the additional charge, Nick Clegg claimed.

Nick Clegg says extra council tax bands are a workable alternative to a 'mansion tax'
Nick Clegg says extra council tax bands are a workable alternative to a 'mansion tax'

The Deputy Prime Minister explained the decision to drop the Liberal Democrats' totemic proposal for a "mansion tax" levy on high value homes in favour of the simpler system of extra council tax bands, saying it had been scrutinised by Treasury officials and was a workable alternative.

Despite the Lib Dems' poor poll ratings - including a record 7% low in the most recent ComRes survey - Mr Clegg insisted he would remain as party leader saying he did not believe in "bailing out" before the general election.

But he was forced to defend the way the new council tax proposals had been drawn up and also faced scrutiny over his £110,000-a-year strategy director Ryan Coetzee.

The plan to target high value properties through additional council tax bands, rather than impose a 1% annual levy on homes worth more than £2 million, was announced by Treasury Chief Secretary Danny Alexander despite not yet having been approved by party members.

But at a Westminster press conference Mr Clegg said: " In our view it is unjust that the council tax system, which is a tax on the value of properties, in effect ends at around £700,000. So someone living in a family home in Lewisham will be paying the same council tax on their home as an oligarch in a £2 million mansion."

He added: " The easiest and most sensible way of doing it is to extrapolate the council tax system by introducing a number of bands beyond those which currently exist."

The Deputy Prime Minister said the two coalition parties had come "very close" to implementing the measure in Government " but the Conservatives decided not to go ahead with it in the end".

Mr Clegg added: " I actually think it would strike many people in those very high value properties as being quite fair, because they will say 'yes, if people in lower value properties down my street are paying different bands why shouldn't that apply to a property of much higher value?'"

Addressing the criticism about the way the policy had been announced, he said: "Nothing is in the manifesto until the manifesto is finally agreed and that will be subject to wider discussion within the party."

Under the proposals the new charge would be collected through local authorities in the same way as the council tax, but the proceeds would go to the Exchequer.

Despite the party's poor poll ratings, and speculation that they could be wiped out in next month's European elections, Mr Clegg insisted he intended to stay as leader through the next Parliament.

"The strategy which we have embarked on as a party is the right strategy. What is the alternative strategy? To lurch this way and that way, to pretend that we had nothing to do with the Government in the last four years? To not take responsibility for the things we have done? No," he said.

"I don't believe in suddenly changing tack or bailing out at the last minute. If you set out to do something, particularly when it's working - forget the politicians, forget the parties, forget the polls which go up and down - it's working for millions of people."

Asked why Mr Coetzee was employed as a taxpayer-funded special adviser while Tory strategy chief Lynton Crosby was paid by his party, Mr Clegg insisted "we are doing everything by the book".

He added: " It's not unusual for politicians in government to ... get support on what are the main concerns of the British public, how can you address them in government and that's exactly what we are doing."

Mr Clegg has gambled on portraying the Lib Dems as the only party for pro-Europeans to vote for next month, but was deemed to have come out second best in two head-to-head debates with Ukip's Nigel Farage about the European Union.

"I didn't remotely think that two debates between myself and Nigel Farage, two hours' debate, were going to reverse 20 years of misinformation about these things," he said.

Responding to a warning by party president Tim Farron that Lib Dem MEPs could be wiped out next month, Mr Clegg said: "I certainly hope we won't lose all our MEPs. I know that's the prediction by some. I have been in politics long enough to know that what is predicted and what happens is often somewhat different.

"Clearly the European elections are much, much tougher for us this time round than they were last time we fought them because we are in government this time. We are in government in a coalition, which is a controversial thing, we are doing very controversial, downright unpopular things for the sake of the country in the long run.

"I just have that old-fashioned belief, intuition if you like, that come May 2015 when people have to decide who is going to govern this country, who is going to continue to take the difficult decisions to finish the economic repair job that we have embarked upon, they will be looking to politicians and parties who have shown the steel to finish the job but also have the right values to finish the job fairly. I think only the Liberal Democrats fit that bill.

"I don't think you could ever rely on the Conservatives, I certainly know this having been in government for four years, to really go that extra mile to make this recovery as fair as possible. You certainly can't rely on Ed Balls and Ed Miliband who still fail to apologise for their responsibility for the economic meltdown in the first place to finish the painstaking work of putting our economy right."

He added that if economic data out this week shows a reverse to the squeeze on living standards, Mr Miliband's party would have lost their main line of economic attack.

Mr Clegg said: "If this latest suggestion from the Labour Party that somehow living standards will never recover again also proves to be wrong, what on earth will the Labour Party have to say on the most central issue of the day, namely how we manage our economy, come May of next year?"

In response to Mr Clegg's council tax band comments, Tory Party vice-chairman Bob Neill said: "Such new housing taxes would invariably spread to more and more homes.

"People will wake up the day after the election and discover suddenly their more modest home has been labelled a 'mansion'.

"The taxes will hit ordinary families who have saved and worked hard, but who happen to live in an area with high property prices such as London and the South East."

He added that n ew council tax bands cannot be introduced "without a wholesale revaluation".