Nick Clegg’s poor call on Mansion Taxes

Samuel Kerr says Nick Clegg is deeply misguided over his tax plans.

Opponents of the Deputy Prime Minister must rub their hands with glee every time Nick Clegg plonks himself in the chair at LBC radio studios. This weekly dose of voter interaction has been subtly named ‘Call Clegg’.

The programme is one of the few pieces of genuine fun left in politics. Members of the public can ring up and savage a senior member of Her Majesty’s government to their hearts’ content. It has produced some truly wonderful episodes of radio theatre – none perhaps so amusing as the time when the Mayor of London decided to add his own insights to the show by demanding that ministers such as Mr Clegg actually use the public transport that they so often herald rather than just admire it from their ‘posh Limos’.

However, I digress. It is the belief of many political commentators that Mr Clegg exposes himself to this myriad of criticism every week because it makes him seem approachable and ‘in touch’ with voters – a sort of ‘everyman’ in the heart of government with your best interests at heart.

It must therefore be a source of deep concern for Liberal Democrats that every time Mr Clegg takes to the airwaves he seems more and more out of touch, the latest issue being his proposed mansion tax.

In the latest episode of ‘Call Clegg’, the Deputy Prime Minister was phoned by a man whose house had rocketed in value, and was now worth over £5 million. However, instead of rejoicing at his good fortune, the caller was saying that he would have to sell his house due to the excessive tax he would now have to pay on the property.  Nick Clegg’s sound advice was for the caller to remortgage his home. It seems extraordinary that someone in such a senior government post would advise people to take on greater levels of debt. This also flies in the face of Conservative calls for greater budgetary responsibility – both on a national and personal level.

This particular call followed a similar remark by Mr Clegg that  elderly people should sell their homes if they are valued at over £2 million. This should be done, according to Mr Clegg, so that their dependents avoid having to pay the ‘mansion tax’ as part of their inheritance.

NickClegg

These responses to people’s genuine concerns about potentially life-changing taxation, demonstrate that Nick Clegg is simply out of touch. Many people who bought their homes for several hundreds of thousands of pounds fifteen or so years ago are now facing the realisation that their homes are worth much more. These people cannot easily sell their homes due to the current state of the property market. Many do not want to remortgage because that would involve taking on more debt at a time of intense financial uncertainty. Therefore, they are now faced with a crippling taxation that will make difficult times even harder. Many of these people are already mortgaged to the hilt, and most are not part of the ‘elite 1%’ that the populist Mr Clegg wishes to target. The reality is that most of these people are part of an inspirational middle class who have been forgotten by government.

The mansion tax not only fails on a human level, but on an economic one as well. I would be very surprised if any foreign oligarch is now going to buy an expensive house in London with this mansion tax rearing its ugly head. Cities such as New York or Dubai will be far more attractive options.  The mansion tax could result in the bursting of the fabled London ‘property bubble’ that for so long has been trumpeted as indestructible. Further, a demonstrable drop in property values in London due to a lack of demand will have a knock on effect for the rest of the country. Property value drops at the top of the market will once again lead to the situation where middle class homes drop to the levels where they are worth less than the mortgages being paid on them. This will hit middle income families as well as poorer ones. Mr Clegg’s call for a mansion tax thus shows a lack of human empathy as well as a basic misunderstanding of economic principles.

However, do not despair. Unlike other politicians, who do not have to face the voters and answer for their misguided policies, you can always ‘Call Clegg’.

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