That mansion tax motion

Today's Opposition motion in the House of Commons read: "That this House believes that a mansion tax on properties worth over £2 million, to fund a tax cut for millions of people on middle and low incomes, should be part of a fair tax system; and calls on the Government to bring forward proposals for such a tax at the earliest opportunity."

Note the tie to funding a tax cut. This is what caused Liberal Democrat MPs to refrain from supporting the motion. If Labour had omitted that clause, they might have been able to peel more of the rank-and-file away. LibDems in government were never going to support a tax policy which was not included in the coalition agreement, but back-benchers might have been tempted to support an unadulterated statement of LibDem policy.

There is some justification for directing the revenue to reducing the effects of inflation on benefits, for extra funding for public works - which Vince Cable appears to favour - or simply to reduce the public sector debt. Labour speakers indicated that they wanted to reintroduce the failed 10p starter rate of tax, which the IFS describes as "too complex". The coalition has already factored in a big increase in the personal income tax allowance and a 10p rate is not likely to feature in a future LibDem manifesto.

Bonuses

Earlier in the day, during questions to the Treasury team, this interchange took place:

Mr Hepburn [Stephen Hepburn, Jarrow (Labour)]:

Bankers’ bonuses are up £15 billion, executive boardroom pay is up by 27%, and the richest 1,000 people in this country have increased their wealth by £155 billion, yet there is still a tax cut on the way for the richest 1%. When is the Chancellor going to do something for the other 99% who are paying the bill to subsidise the lifestyle of his privileged chums?

Mr Osborne:

We are increasing the personal allowance for 24 million people. Bankers’ bonuses were £15 billion a year when the shadow Chancellor was City Minister, but they have come down to just over £1 billion—a dramatic reduction as we now have a more responsible financial sector.

This confirms my impression that Liam Byrne was talking through his posterior last week when he spoke of raising £1.3bn from a bankers' bonus tax. Only the most fervent socialist in the House would seriously consider a tax of more than 100%.