Clegg aids Labour's tax attack on the Tories

The Deputy PM went further than before and accused his coalition partners of turning "a blind eye to the super wealthy" by opposing a mansion tax.

The Tories and the Lib Dems have never sought to hide their differences over a mansion tax. But Nick Clegg went further than ever last night when he accused his coalition partners of "turning a blind eye to the super wealthy". He told ITV News

The Conservatives need to speak for themselves. I for the life of me don't understand why the Conservatives think it's ok that an oligarch can buy a palace in Regent's Park for tens of millions of pounds and pay the same council tax as a three-bedroom family house in Lewisham.

That is just unfair. We can't keep turning a blind eye to the super wealthy basically being taxed the same way on their properties as hard working families across the country.

Clegg's words prompt the question of whether the Lib Dems will line up with Labour if and when Ed Miliband succeeds in forcing a Commons vote on a mansion tax. Vince Cable has suggested that his party will vote in favour of the opposition motion provided that it is not tied to the reintroduction of a 10p tax rate (which the Lib Dems oppose) and Clegg similarly indicated that it would depend on the wording. 

Neither Vince nor I know what will be put before us so we can't of course determine in advance how we would vote.

But of course the Liberal Democrats for a long time have been the leading advocate of greater fairness in tax.

I've been told by a Labour source that the motion will not include a commitment to introduce a 10p tax band in order to maximise the chances of support from the Lib Dems. The party sees the vote as a chance to show how the Tories are on the wrong side of the new tax divide in British politics. Miliband believes that the Conservatives' decision to write privately to their donors soliciting funds to combat a "homes tax" leaves them particularly vulnerable to the charge that they are the party of the rich. 

The irony is that before the last Budget, George Osborne, the man now leading the charge against the tax, considered introducting two or three new higher council tax bands on houses worth more than £1m, a measure that the Lib Dems could have presented as a mansion tax. But this option was ruled out after David Cameron's shire Tory instincts asserted themselves and the PM personally vetoed the proposal. With the Tories now having ruled out anything resembling a mansion tax, the Lib Dems see no reason to go easy on their coalition partners.  

Nick Clegg with Ed Miliband at Buckingham Palace to mark the Duke of Edinburgh's 90th birthday on June 30, 2011 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Forget planning for no deal. The government isn't really planning for Brexit at all

The British government is simply not in a position to handle life after the EU.

No deal is better than a bad deal? That phrase has essentially vanished from Theresa May’s lips since the loss of her parliamentary majority in June, but it lives on in the minds of her boosters in the commentariat and the most committed parts of the Brexit press. In fact, they have a new meme: criticising the civil service and ministers who backed a Remain vote for “not preparing” for a no deal Brexit.

Leaving without a deal would mean, among other things, dropping out of the Open Skies agreement which allows British aeroplanes to fly to the United States and European Union. It would lead very quickly to food shortages and also mean that radioactive isotopes, used among other things for cancer treatment, wouldn’t be able to cross into the UK anymore. “Planning for no deal” actually means “making a deal”.  (Where the Brexit elite may have a point is that the consequences of no deal are sufficiently disruptive on both sides that the British government shouldn’t  worry too much about the two-year time frame set out in Article 50, as both sides have too big an incentive to always agree to extra time. I don’t think this is likely for political reasons but there is a good economic case for it.)

For the most part, you can’t really plan for no deal. There are however some things the government could prepare for. They could, for instance, start hiring additional staff for customs checks and investing in a bigger IT system to be able to handle the increased volume of work that would need to take place at the British border. It would need to begin issuing compulsory purchases to build new customs posts at ports, particularly along the 300-mile stretch of the Irish border – where Northern Ireland, outside the European Union, would immediately have a hard border with the Republic of Ireland, which would remain inside the bloc. But as Newsnight’s Christopher Cook details, the government is doing none of these things.

Now, in a way, you might say that this is a good decision on the government’s part. Frankly, these measures would only be about as useful as doing your seatbelt up before driving off the Grand Canyon. Buying up land and properties along the Irish border has the potential to cause political headaches that neither the British nor Irish governments need. However, as Cook notes, much of the government’s negotiating strategy seems to be based around convincing the EU27 that the United Kingdom might actually walk away without a deal, so not making even these inadequate plans makes a mockery of their own strategy. 

But the frothing about preparing for “no deal” ignores a far bigger problem: the government isn’t really preparing for any deal, and certainly not the one envisaged in May’s Lancaster House speech, where she set out the terms of Britain’s Brexit negotiations, or in her letter to the EU27 triggering Article 50. Just to reiterate: the government’s proposal is that the United Kingdom will leave both the single market and the customs union. Its regulations will no longer be set or enforced by the European Court of Justice or related bodies.

That means that, when Britain leaves the EU, it will need, at a minimum: to beef up the number of staff, the quality of its computer systems and the amount of physical space given over to customs checks and other assorted border work. It will need to hire its own food and standards inspectors to travel the globe checking the quality of products exported to the United Kingdom. It will need to increase the size of its own regulatory bodies.

The Foreign Office is doing some good and important work on preparing Britain’s re-entry into the World Trade Organisation as a nation with its own set of tariffs. But across the government, the level of preparation is simply not where it should be.

And all that’s assuming that May gets exactly what she wants. It’s not that the government isn’t preparing for no deal, or isn’t preparing for a bad deal. It can’t even be said to be preparing for what it believes is a great deal. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.