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Sunday, December 09, 2012

Two-faced Tories in show of bad faith

Friday's Guardian reports on the real story behind the Chancellor's rejection of a mansion tax in last week's autumn statement. They say that the Conservative party privately sent letters to Tory donors and wealthy homeowners promising to defeat Liberal Democrat plans for the tax at the same time as their coalition partners thought they were negotiating on a version of the proposal ahead of the autumn statement:

The letters, under the slogan "Don't Tax Our Homes", were sent last month and appealed for funds because the party needed "to combat Ed Balls and Vince Cable's homes tax". It is likely to be the first time that one wing of the coalition has sought to raise funds to defeat the proposals of the other wing.

The letters were sent by the Conservative treasurers Lord Fink and Michael Farmer in November, when Lib Dem cabinet ministers privately believed there was hope that the Conservatives would agree to two extra higher-rate council tax bands as a way of raising funds from wealthy homeowners, mainly in the southeast.

They believed they were making progress on the issue with George Osborne, if not with David Cameron.

They say that Liberal Democrats MPs, including the business secretary, Vince Cable, have previously claimed that Cameron's opposition to a mansion tax stemmed from fears of a backlash from his wealthy donors, but the letter suggests that Cameron even saw opposition to the proposal as a way of raising new funds for his party:

The letter, jointly signed by Fink and Farmer, reads: "As you may be aware, the Liberal Democrats and Labour have both called for a homes tax in recent months.

"Vince Cable demands a tax on properties worth above £2m. Labour's shadow chancellor Ed Balls meanwhile told the Independent at the beginning of September that he was planning a proper wealth tax which would include high value properties.

"The Conservative party are clear that a homes tax will not happen on our watch."

The letter – which offers a range of options for homeowners to join the Tory party's business and entrepreneurs forum (cost £2,500), front bench club (cost £5,000), renaissance forum (cost £10,000) and Team 2000 (cost £2,000) – continues: "We are on the side of the savers and strivers. We believe that people who work hard and want to get on in life deserve support from the government. A tax on property is a tax on ambition and aspiration.

"We promise that no homes tax will be introduced during the course of this parliament, but the only way of taking it off the table in the future is the election of a majority Conservative government in 2015, and we can only win with your generous support. To keep the taxman out of your home and return a Conservative government at the next general election, please help by donating today and supporting the 'No Homes Tax' campaign."

It seems that negotiations were being conducted in bad faith on the part of the Conservative party. Why should we not be surprised?
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