Cable concession on 'mansion tax'

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Vince Cable has conceded he could have consulted more widely with his Lib Dem colleagues before announcing plans for a "mansion tax" on expensive homes.

The party's treasury spokesman said criticism of his handling of the new policy at its annual conference by several fellow MPs was "fair".

One MP called the plan to levy a charge on £1m plus houses to pay for tax cuts for the low-paid as "codswallop".

Mr Cable has defended the principle behind the policy as sound.

He says it fits in with the party's philosophy of asking the wealthiest in society to contribute more to fund tax cuts for those on low incomes.

Several MPs vented their anger at the proposed tax and the lack of discussion about it outside leadership circles.

It was reported that several frontbench spokesmen were not informed that the policy was going to be unveiled on Monday.

'Fair criticism'

Speaking on the final day of the party's annual conference, Mr Cable said he had discussed the "broad principle" of the policy with colleagues but acknowledged he could have gone further.

"I think we could have consulted more, I think that's a fair criticism," he said.

The meeting of Lib Dem MPs, at which the grievances were aired, had been "robust", he noted.

A new charge of 0.5% would apply to the value of a property above £1m.

If a home is worth £1.5m, the 0.5% tax would apply to £500,000 of it, meaning the owner will have to pay £2,500 a year. The extra tax on a £4m property would be £15,000 a year.

The Lib Dems say it will raise £1bn a year, to be used to raise tax thresholds for four million of the lowest-paid workers - effectively taking them out of tax altogether.

But the party has been forced to admit the measure will only be temporary, until it is replaced by a local income tax, and that it would require separate legislation to introduce it in Scotland.

Former Lib Dem leader Lord Ashdown has admitted the handling of the policy was not the party's "finest hour" in terms of communication.

"Nothing wrong with the policy, but we've got to learn to get these things right," he told the BBC.