Prime minister David Cameron has ruled out a mansion tax on expensive properties putting him on a collision course with Liberal Democrat coalition partners.
Speaking on the BBC Andrew Marr show as the Conservative party gathered in Birmingham for its autumn conference yesterday, Cameron said there will be further measures to make sure the rich pay more.
Cameron said the Government needed to find a further £16bn of cuts before the next election in 2015/16 and pledged to cut the welfare budget.
In its last election manifesto, the LibDems proposed an annual charge on properties worth more than £2m, dubbed a mansion tax, and the Lib Dem conference in Brighton last month vowed to fight for the measure.
The move is a blow to deputy prime minister Nick Clegg who last month said he thought he could convince the Conservatives to introduce a wealth tax and ruled out further cuts unless there were more tax increases on the richest.
Cameron said: “We are going to take further action to make sure the richest people in our country pay a fair share towards deficit reduction.
“But I don’t think we should be a country where you work hard, you save, you buy yourself a house and pay down the mortgage and save and invest in that house then I don’t want to be a country that comes after you every year with a massive, great tax so that is not going to happen.”
When asked if he was referring to a mansion tax, Cameron replied “yes”.
He added: “We have put extra taxes when people buy very expensive properties. I am not going to announce the measures here on this programme but we will always be fair and seen to be fair.”
Chancellor George Osborne also ruled out the tax and told the Mail on Sunday: “Before the election they will call it a mansion tax, but people will wake up the day after the election and discover suddenly their more modest home has been labelled a mansion.
“We don’t think people who have worked hard, saved up to buy a home, should be clobbered with a mansion tax.”