Finance (No. 2) Bill
Debate between Stephen Williams and Daniel Kawczynski(11 years, 7 months ago)
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Stephen Williams
The mansion tax, as the name suggests, is a tax on mansions. If a farmhouse on agricultural land was of mansion proportions and, whether it was in Carmarthen or elsewhere, was valued at more than £2 million, it would fall within the scope of a mansion tax, but the agricultural land itself—whether it is in the curtilage of the house or in the wider area of the farm—would not fall within the remit of a mansion tax. However, my party is currently reviewing all its tax policies, including the taxation of land. I do not want to be diverted too far down this route, although it is an issue on which my party has campaigned since the days of Lloyd George, who, as I am sure hon. Members will agree, was probably the most significant Prime Minister of the 20th century. I will say no more on that on this particular day.
I will do my best to help the Labour party with some of the other details of how the Liberal Democrats think that the mansion tax should work. A criticism that is made of the mansion tax is what happens if a pensioner or someone on a low income is living in a house valued at more than £2 million—the so-called asset rich, but income poor. Our answer is straightforward. Someone in those circumstances would defer payment of the tax until the property was sold or their income rose to a level at which they were able to pay it. The most likely scenario is that when the property was sold, the deferred, rolled-up tax liabilities would crystallise and be met out of the proceeds of sale. That is the answer to the asset rich, income poor conundrum.
Another major principle, which might help the Labour party, is that we see the mansion tax as a national tax. There is a debate to be had about what we do with our only existing property tax—the council tax—such as introducing higher bands, but that is a debate for another day. In any event, the council tax is a local tax and we are clear that the mansion tax, as the Liberal Democrats propose it, should be a national tax and form part of the rebalancing of the tax system away from taxes on work and enterprise and on to income from wealth speculation and pollution.
Our principles on the mansion tax are well thought through. Unfortunately, they are not currently shared by enough of our Conservative coalition colleagues. Some share our enthusiasm for a mansion tax, but a majority—certainly ministerial colleagues—do not.
Daniel Kawczynski
The point made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) is important, and I was worried that the hon. Member for Bristol West (Stephen Williams) could not answer it as clearly as I would like. Farming is an essential part of many estates in Shropshire, and the land and agricultural buildings could tip them over the limit. Shropshire farmers are struggling already with prices from supermarkets, and I am very concerned that, if this tax were introduced under those circumstances, they would be adversely affected.
Stephen Williams
The hon. Gentleman is essentially asking me a variant of the question asked by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). He mentions agricultural buildings. Clearly, a mansion tax is a residential property tax: a tax on the building that the landowner—the farmer, the rich individual or whoever—lives in. It would not include barns, pigsties and the other agricultural buildings to which he referred, even if they have a high value. This would simply be a tax on residential property occupied by a person, not farm animals or anyone else: only the farmhouse itself, or the estate house, would fall into the ambit of a mansion tax.
Coming directly to the problem with new clause 5, the poor clever people in the Treasury simply do not have enough detail to go on to produce this study within six months of the passage of the Bill. This is the opportunity for Labour Front Benchers to answer these questions. They can intervene as many times as they like. [Interruption.] If they are listening, of course. This is an opportunity for them to tell us how the Treasury is going to conduct this study. It really does need some more detail. Is Labour’s variant on the mansion tax a tax on the whole of the £2 million, or is it a tax on the excess of the £2 million? That is completely unclear from any of the speeches made by shadow Ministers, or from the motion. What is the base of the tax?