Labour out to cause red faces in the UK over 'mansion tax'

The United Kingdom's opposition Labour Party will call a parliamentary vote on leader Ed Miliband's plan to levy a tax on houses valued at more than £2 million (Dh11.3m), in an effort to embarrass Liberal Democrat ministers including the party leader Nick Clegg.

The Liberal Democrats, the junior partners in the prime minister David Cameron's coalition, have advocated such a "mansion tax" as a key policy, arguing it could help discourage investment in property and would also raise money from the wealthy.

Mr Cameron's Conservatives oppose more property taxes. That means Liberal Democrat policymakers might be obliged to vote against the plan.

The vote would not in any case be binding on the government.

"The Lib Dems say they are in favour of a mansion tax," Mr Miliband said on a visit to the southern English town of Eastleigh on Friday, where a by-election will be held on February 28.

"Or will the Liberal Democrats do what they've done for two and a half years: prop up a Tory government that is squeezing the living standards of the middle harder and harder?

"The big question today is for the Liberal Democrats.

"We have said we will table a motion before the budget [on March 20] to introduce a mansion tax.

"They have said they are in favour of that. I say to him, 'Tell us you will vote with Labour to force George Osborne's hand and force him to introduce a mansion tax.'"

Mr Miliband said Lib Dem pledges that "behind the scenes" deals would persuade the Conservatives to introduce such policies had not worked over the three years of the coalition government.

He said, as a result, the party had become an "accomplice" to the Conservatives.

"Let's see that at least on this [Mr Clegg] has got the courage of his convictions," said Mr Miliband.

With support from the Lib Dems and other smaller parties, the commons could find the numbers to pass such a tax.

However, the Lib Dems gave the idea a frosty response on Saturday night, saying a commons vote on the issue would throw Mr Osborne's budget preparations into chaos. "[Labour] are doing just silly politics.

"This is the sort of thing that does not appeal to the public," said Stephen Williams, the Lib Dem's treasury spokesman.

On Saturday, Mr Osborne was at a meeting of finance ministers from the G20 leading and emerging economies in Moscow, where it was agreed to crack down on tax avoidance by multinational companies.

Members said they were determined to develop measures to stop firms shifting profits from a home country to pay less tax elsewhere.

The key change in UK property tax this year is the introduction of a new category of owner called "non-natural persons" (NNPs), which includes all offshore and onshore corporate entities, collective investment schemes, some partnerships and some trusts.

All UK residential property valued at more than £2m is subject to the new regime.

The changes are applicable to all foreign nationals, UK citizens and non-resident expatriates who own property through NNPs.

Some categories such as property developers and buy to let investors will be exempt.

lbarnard@thenational.ae

* with agencies