Cable offers to swap 50p rate for a levy on most expensive homes

BUSINESS secretary Vince Cable has suggested Liberal Democrats could allow the 50p rate of tax on top earners to be dropped if the Tories agree to impose a “mansion tax” in return.

Cable’s solution to what has become a difficult impasse for the coalition parties is to replace the 50p tax with a levy on homes worth more than £2m.

Hinting at a potential deal, he said the idea was “out there as a proposal” as it was important to be pragmatic about the issue.

His suggestion at the Liberal Democrat conference in Birmingham was less strident than the rhetoric of party leader Nick Clegg, who has been quoted saying any cut to the 50p rate would be “utterly incomprehensible” to voters.

Meanwhile chancellor George Osborne has made no secret of his wish to end the 50p rate, which was imposed by the Labour government.

Cable, said: “The argument for that [the mansion tax] has increased because of the way the property market has worked, particularly in high value areas like London.

“So that is out there as a proposal. It is not in the coalition agreement but if the Conservatives were willing to run with that then one could be more flexible with the 50p rate.”