Lib-Dems revolt at Cable's tax on £1million homes

Nicholas Cecil, Chief Political Correspondent
22.09.09

Liberal Democrat leaders Nick Clegg and Vince Cable were today hit with an open revolt against their radical tax and public spending plans.

The party's conference in Bournemouth descended into infighting over a series of issues including a "mansion tax", moves to ditch the party's pledge to abolish university tuition fees and means testing child benefit. Angry recriminations flew over the announcement yesterday of the proposed levy on homes worth more than £1million.

One senior MP reportedly lambasted it as "complete codswallop" and another as "suicidal".

The Lib-Dem communities and local government spokeswoman, Julia Goldsworthy, whose brief includes town halls that would have to collect the tax, was said to have been kept in the dark over the announcement. Left-wing MP Steve Webb, the party's work and pensions spokesman, also appeared to voice concerns over dire warnings by Mr Cable, the Treasury spokesman, and Mr Clegg, the party leader, who has raised the prospect of "savage" cuts in public spending.

"I think we have overdone the despair," Mr Webb told delegates. "Doom and gloom does not inspire and motivate people. People want it straight but they also want hope."

He warned of alienating voters with alarming forecasts of cuts and flatly rejected the idea floated days ago that child benefit should be means-tested.

But Mr Clegg's chief-of-staff, Danny Alexander, defended the party's Fresh Start for Britain blueprint and warned that the Lib-Dem economic plan must be "economically credible". He said: "We must not make any firm commitment for the next Parliament unless we are certain it can be paid for."

Evan Harris, MP for Oxford West and Abingdon and of the party's federal policy committee, warned Mr Cable and Mr Clegg to listen to activists. He has spoken out in defence of keeping the policy on abolishing university tuition fees. Today he said: "Good Liberal Democrat leaders only become great leaders when they learn that the party makes the policy."

The growing rows risk providing a difficult backdrop to Mr Clegg's speech tomorrow. However, some believe it could help define him as a strong leader willing to take on his party.

The backlash against the mansion tax, which would be 0.5 per cent on a home's value above £1million, is likely to damage Mr Cable's reputation as an economic guru. The former chief economist for Shell has been ahead of the game on economic problems but was left having to explain how the tax would work after Mr Alexander struggled with the details.

Mr Cable also sparked confusion over policy on Crossrail by warning against being "mesmerised" by big projects.

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