Osborne has a mini-mansion tax already up his sleeve

Coalition negotiations over the Autumn Statement are fraught but there is one wheeze that could help the Chancellor.

After November’s rash of mini-elections, the next big item on the political calendar is the Chancellor’s Autumn Statement on the economy – on 5 December. (Yes, it is autumn. Winter formally begins with the solstice, but that’s a debate for a different blog.)

The weak performance of the economy means new devices are required if George Obsorne is to show sufficient progress towards his key fiscal targets. That obligation has forced the coalition into another tricky round of tax and cut negotiations. Broadly speaking, the Chancellor wants the lion’s share of the savings to come from the welfare budget. The Lib Dems accept that the benefits bill is too big to be spared but they insist on some form of wealth tax to spread the burden of pain. Their preferred device is the “mansion tax” – a levy on posh real estate.

There are a number of obstacles to this. For one thing, the Chancellor appeared to rule it out before his party’s annual conference. But I’m told by a number of sources that the Prime Minister is the bigger obstacle to wealth taxes of any kind. Perhaps the Chancellor was stung by his misreading of the politics around the 50p income tax rate into recognising the public appetite for conspicuous contributions from those at the very top. David Cameron, by contrast, is said to be stubbornly hostile – something which is causing the Lib Dems considerable frustration.

Usually, people around Nick Clegg are careful not to criticise the Prime Minister too much, saving their darkest whispers for moans about Tory backbenchers who are perceived to be sabotaging the coalition project. The tone now seems to be changing as top Lib Dems mutter about Cameron’s “Shire Tory” instincts and impulse to protect “his rich friends”. In the last couple of weeks I have heard language from people very close to Clegg that echoes the Labour charge that Cameron is out of touch, doesn’t understand how much ordinary people are suffering and is the product of a rarefied, gilded world where his priorities have been warped. As coalition mood music, this is new.

Cameron is also steadfastly refusing to consider any cut in pensioner benefits, having made a “read my lips”-style pledge to protect them in the election campaign. As one government strategist puts it, the PM is terrified of a “split-screen moment” in 2015, with the sequence where he flatly denied he would raid pensioner entitlements in 2010 run alongside some mealy-mouthed U-turn. He will do anything to avoid that hazard.

That doesn’t leave much room for manoeuvre. A freeze in the overall level at which benefits are paid (experienced as a cut when inflation is rising) is likely to do a fair amount of the fiscal work. Another idea floating around is to limit the number of children for whom families can claim child benefit. Iain Duncan Smith has floated a cap of two. The Lib Dems seem divided on this. Some hate the whole idea, thinking it redolent of Victorian-era horror at the idea of poor people breeding. Others think it might be necessary but resist the IDS level. One figure close to Clegg describes a two children-per-family benefit rule as “a bit Chinese” – a reference to Beijing’s one-child-per-family rule.

There’s much more of this kind of argument (and briefing) to come in the weeks ahead. I’m told by someone intimately involved in the negotiations that they will “go to the wire”. So I’ll save some more observations for another blog.

One final thought. Someone in Westminster who spends a lot of time looking at fiscal policy, among other things, yesterday drew my attention to a little-advertised consultation the Treasury carried out over the summer.

It stems from a line in the 2012 Budget, in which the Chancellor promised to raise some money by taxing property transactions carried out by “non natural persons”. That means, roughly speaking, companies, investment schemes and “non dom” individuals who are resident abroad for tax purposes. The relevant section of the Budget speech is as follows:

A major source of abuse – and one that rouses the anger of many of our citizens – is the way some people avoid the stamp duty that the rest of the population pays, including by using companies to buy expensive residential property. I have given plenty of public warnings that this abuse should stop.

Now I'm taking action. I am increasing the Stamp Duty Land Tax charge applied to residential properties over £2 million bought into a corporate envelope.

The charge will be 15%. And it will take effect today.

We will also consult on the introduction of a large annual charge on those £2 million residential properties which are already contained in corporate envelopes. And to ensure that wealthy non-residents are also caught by these changes, we will be introducing capital gains tax on residential property held in overseas envelopes.

Then go to section 2.12 of the consultation document and you get some more detail on the “annual charge” on properties worth more than £2m owned by “non natural persons”, due to be introduced next year. The idea is to make it less attractive for the owners of high value residencies to hold them in corporate vehicles. That in turn should make it easier to charge the new 15 per cent stamp duty rate and capital gains tax on any transactions involving those properties.

I can’t begin to speculate about how much money the Treasury would realistically expect to make from this device. I would, however, hazard a guess that it can be spun quite heavily as a tax clampdown on rich foreign tax dodgers and a kind of mansion tax. That would, of course, mean essentially re-announcing something that has already been signaled, but this government is as good at serially re-announcing things as the last one was. Better even.

To form part of a credible “wealth taxes” story it will have to be packaged up with something much more substantial, but it has Osborne wheeze written all over it. The consultation has been done, it hits “foreign millionaires” and “mansions” and it’s been flagged up already so can be squared with the PM. From the Chancellor’s point of view, as headline-nabbing political tactic, what’s not to like?

Chancellor George Osborne speaks at the Conservative conference in Manchester last month. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Is there such a thing as responsible betting?

Punters are encouraged to bet responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly.

I try not to watch the commercials between matches, or the studio discussions, or anything really, before or after, except for the match itself. And yet there is one person I never manage to escape properly – Ray Winstone. His cracked face, his mesmerising voice, his endlessly repeated spiel follow me across the room as I escape for the lav, the kitchen, the drinks cupboard.

I’m not sure which betting company he is shouting about, there are just so many of them, offering incredible odds and supposedly free bets. In the past six years, since the laws changed, TV betting adverts have increased by 600 per cent, all offering amazingly simple ways to lose money with just one tap on a smartphone.

The one I hate is the ad for BetVictor. The man who has been fronting it, appearing at windows or on roofs, who I assume is Victor, is just so slimy and horrible.

Betting firms are the ultimate football parasites, second in wealth only to kit manufacturers. They have perfected the capitalist’s art of using OPM (Other People’s Money). They’re not directly involved in football – say, in training or managing – yet they make millions off the back of its popularity. Many of the firms are based offshore in Gibraltar.

Football betting is not new. In the Fifties, my job every week at five o’clock was to sit beside my father’s bed, where he lay paralysed with MS, and write down the football results as they were read out on Sports Report. I had not to breathe, make silly remarks or guess the score. By the inflection in the announcer’s voice you could tell if it was an away win.

Earlier in the week I had filled in his Treble Chance on the Littlewoods pools. The “treble” part was because you had three chances: three points if the game you picked was a score draw, two for a goalless draw and one point for a home or away win. You chose eight games and had to reach 24 points, or as near as possible, then you were in the money.

“Not a damn sausage,” my father would say every week, once I’d marked and handed him back his predictions. He never did win a sausage.

Football pools began in the 1920s, the main ones being Littlewoods and Vernons, both based in Liverpool. They gave employment to thousands of bright young women who checked the results and sang in company choirs in their spare time. Each firm spent millions on advertising. In 1935, Littlewoods flew an aeroplane over London with a banner saying: Littlewoods Above All!

Postwar, they blossomed again, taking in £50m a year. The nation stopped at five on a Saturday to hear the scores, whether they were interested in football or not, hoping to get rich. BBC Sports Report began in 1948 with John Webster reading the results. James Alexander Gordon took over in 1974 – a voice soon familiar throughout the land.

These past few decades, football pools have been left behind, old-fashioned, low-tech, replaced by online betting using smartphones. The betting industry has totally rebooted itself. You can bet while the match is still on, trying to predict who will get the next goal, the next corner, the next throw-in. I made the last one up, but in theory you can bet instantly, on anything, at any time.

The soft sell is interesting. With the old football pools, we knew it was a remote flutter, hoping to make some money. Today the ads imply that betting on football somehow enhances the experience, adds to the enjoyment, involves you in the game itself, hence they show lads all together, drinking and laughing and putting on bets.

At the same time, punters are encouraged to do it responsibly. What a laugh that is. It’s like encouraging drunks to get drunk responsibly, to crash our cars responsibly, murder each other responsibly. Responsibly and respect are now two of the most meaningless words in the football language. People have been gambling, in some form, since the beginning, watching two raindrops drip down inside the cave, lying around in Roman bathhouses playing games. All they’ve done is to change the technology. You have to respect that.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war