Housing emerged as a key Lib Dem weapon against the Conservatives and Labour at the party conference today.
First up was shadow chancellor Vince Cable’s plan for a 0.5% levy on all homes worth more than £1m - a complete contrast with the continuing Tory commitment to cut inheritance tax on all estates below £1m. ‘The Tories top priority is to cut taxes on millionaires,’ he said. ‘Our top priority is fairer taxes for those on lower and middle incomes.’
The 0.5% levy could raise a lot of money: £1.1bn is almost half the expected take from the new 50% rate on earnings above £150,000. According to the Lib Dems, that would be enough to take 300,000 low paid workers and pensioners out of the tax system.
Some of the details have yet to be worked out - not least how to value a £1m house - but it’s good to see at least one senior politician tackle taxation of housing.
Cable said the deficit had to be cut - not least because of the slump in the tax take from the housing and financial markets that were ‘temporary windfalls that were treated as permanent’. But he warned: ‘If public spending is cut in the usual way – slash and burn – there will be great damage to local and national services. Good will be cut with bad. Front line services will be butchered and lower paid workers will bear the brunt of cuts. There will be particular damage to public investment in areas like social housing which we need desperately to rebuild houses to rent.’
He named alternatives including cuts in civil service bonuses, scrapping grandiose database schemes and cutting tax breaks for high earners. He said the levy would put an end to the situation where the super-rich pay the same council tax on their £30m mansions as people in Band H family homes.
Next up was shadow housing minister Sarah Teather with a speech that centred on the plight of thousands of people she said Labour had taken for granted and let down. ‘The people who live in chronic housing hell are the people who time after time, election after election, Labour take as a given. We’ve all seen the arrogance of the Labour party on election day. They go straight to the poorest areas, bang on every door and herd them out to vote. And yet they have failed the very people who elected them.’
While she had strong words for the Tories too, her main attack was on a Labour party she said had failed. ‘Building the new homes we need is not going to happen overnight,’ she said. ‘I can’t tell the people who come to my surgery that a Liberal Democrat Government will wave a magic wand and fix everything. But I can tell them, that step by step, brick by brick, we will rebuild this country’s housing stock. I can say, that if we are asked to choose between hiking up taxes on billionaires or on tenants, we will not choose tenants.’
So can the Lib Dems turn housing into an issue that can take votes from both Labour and the Tories? Teather’s message certainly seems in tune with the way the Lib Dems have conducted grassroots campaigns to take Labour seats. It remains to be seen whether the popular Cable can make headway against George Osborne on tax.
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