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Clegg renews his push for a mansion tax

The Deputy PM warns that coalition support will fade if the rich are not targeted.

It's Nick Clegg's turn to pitch his tent on the increasingly congested terrain of "responsible capitalism" today. As I write, Clegg is delivering a speech at Mansion House in which he makes a distinctively liberal argument for reforming the market. Calling for workers to be given the right to request shares in the companies they work for, he argues:

John Stuart Mill hoped that employee-owned firms could end what he called the 'standing feud between capital and labour'. And liberals have been championing it ever since. We don't believe our problem is too much capitalism: we think it's that too few people have capital. We need more individuals to have a real stake in their firms.

Encouragingly, we also learn this morning that the Deputy PM has renewed his push for George Osborne to adopt some form of property tax. There's no chance of the Chancellor adopting a "mansion tax" immediately, not least because the 50p tax rate will now remain for the duration of the parliament, but it's possible that he will set up a review to look at raising more from the rich by shifting the burden of tax from income to wealth and act to reduce stamp duty avoidance.

As NS editor Jason Cowley argued in a October 2010 cover story ("The coming battle over land and property"), there is a strong meritocratic argument for heavier taxation of unearned wealth (inheritance, property and land) and lighter taxation of earned income. Property taxes are harder to avoid than those on income (you can't move a mansion to Geneva) and reduce the distorting effect that property speculation has on the economy. For the psephologically minded, it's worth noting that high-end property taxes are popular. A recent YouGov poll found that 63 per cent of the public, including 56 per cent of Tories, support a mansion tax, with just 27 per cent opposed.

Clegg's warning that public support for the coalition's deficit reduction programme could fade unless the rich shoulder more of the burden is a prescient one. Those who have benefited immensely, through little effort of their own, from the dramatic rise in house prices over the last decade are an obvious target. Labour, which has been curiously absent from this debate, should not miss a rare opportunity to make common cause with the Lib Dems.

Update: In the Q&A session following his speech, Clegg played down hopes of a mansion tax - "I lead a party with eight per cent of MPs in parliament" - but said he still hopes for "progress" in this area.