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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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.