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Robyn Hall
Lib Dems are worth listening to, for once
I said back in September that the Liberal Democrat proposal to tax homes worth more than £1m was the last thing this country needed. It was a blatantly unfair proposal that would have tied up too many consumers in financial knots just because they happened to live in expensive areas.
The massive outcry the proposal generated among senior party members and the property-owning public seems to have made the party sit up and listen. Instead of a £1m property value threshold the Lib Dems are now proposing that the tax should start at £2m.
While as a concept this is not much of an improvement, at least it seems to have struck a chord with potential voters. And the figures speak for themselves, with the number of households caught by the tax dropping by a staggering 80% to just 19,600.
There is a big gap between properties worth £1m and those worth £2m. In the past it was easy to be on a moderately good wage and after seven years of property ownership suddenly find yourself living in a £1m home.
The same cannot be said for those living in £2m-plus properties. Even after seven years’ growth you’d have had to be jolly wealthy in the first place to have bought a £2m property - either that or lied on a self-cert mortgage application.
But even with a much smaller number of properties falling under the tax, if this proposal was to make it into law the knock-on effect could still cause problems. As far as I can make out, even starting at £2m the tax would bring overall property prices down.
For example, a family living in a property in London worth £2m would pay £5,000 under the proposed levy, which in turn would end up wiping £100,000 off the original value of their property. But it wouldn’t just be their property that would be affected as the effect of the tax would filter down through the property chain, reducing the average property price by some £2,000 and resulting in an unwelcome double whammy - an increase in tax and a cut in wealth.
Despite this, even I have to admit that the Lib Dems’ change of emphasis has transformed what was a clumsy catch-all tax affecting the South-East into a genuine levy on the wealthy who should be able to afford it, capturing both the hearts and minds of the voting public.
But is it right to ask those with the broadest shoulders to bear a little more of the burden so that millions of individuals on normal earnings get the break they desperately need? Lib Dem leader Nick Clegg seems to think so and for once potential voters are starting to take notice of him and his party.
But while the Lib Dems seem to have listened, does anything they say matter? After all, other than some words of wisdom from shadow chancellor Vince Cable during the financial crisis the Lib Dems have been pretty much under the radar.
But that might be about to change. With signs that the Conservative lead in the polls may be starting to shrink there’s talk of a hung parliament after the next election. And if there was no party in overall control the Lib Dems have already said that they would be prepared to work with the party with the highest number of seats - still widely expected to be the Tories.
While I wouldn’t expect such an alliance to last longer than George Hamilton in the jungle this would at least mean that somebody from the Lib Dems would have a seat at the table of power.
Of course, even this won’t mean that any of the Lib Dems’ policies are guaranteed to be discussed, let alone make it onto the statute books. But it does mean we should pay more attention to what they are saying as election day draws closer.
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