Mansion tax popular and right: Cable
SLAPPING a levy on some of the most expensive homes is "popular and right" according to Business Secretary Vince Cable.
In his keynote speech to the Liberal Democrats conference in Brighton, Mr Cable again argued the case for the so-called "mansion tax" on properties worth more than £2million.
Conservative opponents have labelled the Liberal Democrat policy a "tax of envy" – but Mr Cable branded Tory critics "backwoodsmen".
Against the background of continuing austerity measures and the threat of more to come, the issue of tax on wealth has dominated the party conference, with Lib Dem leader and deputy Prime Minister Nick Clegg arguing the need to "start at the top and work down".
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There are an estimated 2,300 properties in the South West worth £2million-plus, and 74,000 across the country.
The Lib Dems have pressed the case for a mansion tax since entering the coalition in 2010, but have so far faced resistance from their Conservative senior partners.
Speaking to conference delegates, Mr Cable said levying very high rates of income tax would be counter-productive.
On the 'core' Lib Dem policy of a mansion tax, he said: "A first step to the proper taxation of wealth and land.
"It horrifies the Tory backwoodsmen but it is popular and right.
"The super-rich can't move their chateaux to Monaco or Switzerland so let's get on with it and tax them here."
Mr Cable also ridiculed calls from the right for a "hire and fire culture", describing those who called for a major relaxation of employment laws, recommended by the Beecroft report commissioned by Downing Street, as "headbangers".
He said: "We have seen off the headbangers who want a hire and fire culture and seem to find sacking people an aphrodisiac: totally irrelevant in a country with flexible labour markets which have created over a million private sector jobs in the last two years.
"Instead, we have concentrated on practical tribunal reform and supported progressive firms who want worker participation and share ownership."
Mr Cable said the new business investment bank would help rapidly expand lending to small and medium-sized firms.
The Government has already raised the prospect of it operating through so-called challenger banks like Handelsbanken, The Co-operative and Aldermore, outside of the big five high street giants.
The Swedish lender Handelsbanken has a branch in Plymouth.
"We need a new British business bank with a clean balance sheet and an ability to expand lending rapidly to the manufacturers, exporters and high-growth companies that power our economy," Mr Cable said. "I am working with the Chancellor to develop a new institution that will combine £1billion of new Government capital with a larger private sector contribution.
"This will apply leverage through guarantees to support up to £10billion of finance to small and mid-sized business – a significant portion of all the lending currently available."
He also said there was a need to stimulate demand in the economy to tackle the recession.
"What we need is an aggressive programme of house-building by housing associations and local councils, with Government providing guarantees so they can build, in large numbers, now," Mr Cable added.
"We need an extra 100,000 houses a year to meet demand. That would create half a million new jobs."