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Has Vince Cable lost his cool?

Or is the architect of the Mansion Tax still the man to lead us out of the crisis?

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by Tony Bonsignore on Sep 24, 2009 at 13:43

Such is the nature of celebrity these days that Saint Vince Cable of the Liberal Democrats was due for a fall from grace.

But few, surely, expected it to happen so quickly.

It was barely a week ago, after all, that Cable was voted Britain’s Most Trusted Politician by the Times. That award was, in part, in recognition of years of repeated warnings about the state of the British economy and the overheated state of the housing market – warnings repeatedly scoffed at by the government and the Conservative opposition.

When the crisis did finally break, Cable quickly evolved into arguably our most sage political commentator, and was more than often than not one step ahead of the game.

When Northern Rock hit the skids, for example, Vince called for immediate nationalisation; the rest of the political pack soon fell into line. When the banks decided that nearly bankrupting the country was deserving of a return to big bonuses, Cable was one of the first to call for a clampdown. Voters warmed to him, newspaper columnists lauded him, ballroom dancers admired his technique…for a long time, it seemed that Saint Vince could do no wrong.

Except this week, at the Liberal Democrat conference in Bournemouth, he did – in the eyes of some anyway. And his crime? To propose a new Mansion Tax on homes worth more than £1 million.

Fellow Liberals immediately took the hump, claiming Cable had made the announcement without their prior agreement. And the details hadn’t been worked out properly, they said. And it was likely to alienate voters in key Liberal constituencies, they warned. And it was easy meat for Tories and Labour to hammer the Liberals with, they protested, etc.

Since then, the anti-Cable floodgates have opened; the Cult of Cable is under attack.

I never liked him anyway, say some; he’s way more right wing than he seems, say others. Some have questioned his connections to oil giant Shell (where he was chief economist in the mid 1990s), while still others have questioned his loyalty to his constituents in Twickenham, particularly in regard to a controversial plan for a riverside development. Check this archetypal rant from Daily Mail writer Richard Littlejohn for a sense of the Cable backlash at its most vitriolic.

So what do you think: were you – and are you still – a fan of Our Vince?

Does the Mansion Tax affair change your view of him? Is it the right policy for a post-crunch Britain, or a badly thought-through attempt to steal a few headlines?

And what of the Cult of Cable?

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18 comments so far. Why not have your say?

Our Vince has become a victim of his own self-worth. And a perfect example of ‘the higher the monkey climbs up the tree, the more you can see of its arse…’.

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If you had the opportunity to catch Vince answering questions on Newsnight after the lazy journos wrote confusing copy about mansions tax you learnt:

*It is not a new tax just the restoration of a sensible top tier to council tax.

*Property taxes are the norm in developed countries not the exception.

*It is the value over and above the £1,000,000 level that is to be taxed at 1/2% p.a.- not a tax on £1,000,000 houses.

In my book David Ricardo would approve though he would probably want to get all fancy about taxing solely "the abnormal premium of market valuation to the re-building cost" (i.e. insurance value). His idea of the "perfect tax" since it falls on a surplus or "rent" and so does not distort economic activity.

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Mr Cable should look at the agents ads for houses and flats in Chelsea, Kensington, Clapham and Dulwich in London.

There are former workmens' cottages selling for near a million in Chelsea

A terrace house in Clapham may be on sale at over a million, though the house next door may be occupied by a pensioner who bought his thirty years ago for 150k.

He should look at the basic causes - pressure of population - the cost and condition of public transport. So property in easy reach of the City and West End have exploded. My daughtger bought a flat in Clapham 12 years ago for 72K - an identical one next door sold for over 400k

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I agree with Ben.

Lazy journos (a new one on me) have a lot to answer for.

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I think Vince Cable takes a measured look at things as they are. If you live outside of London you see the absurdity of 'former workman's cottages selling for near a million in Chelsea'.

If this is still the case then there is a lot of shaking out to come in London's property market.

We're still in an economic downturn. Ask Vince Cable!

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A wealth tax taxes those who already have wealth.

Income tax also taxes those with little wealth who are trying to acquire wealth.

Surely it is fairer to tax those with wealth than those without wealth?

The "mansions tax" on the value of homes over £1m is the most practical approximation to a wealth tax we can get.

So Vince Cable is right about this.

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Normally I find even the Tories too Socialist for my liking, but this idea for higher taxes on houses worth over £1m actually seems pretty sensible to me.

I bought a £1m house in 2005, and it seemed ludicrous to me that my Council Tax on this huge house was only marginally more than I had been paying on a 2-bed flat a few years earlier.

Rather than have a mansion tax as a separate thing, they should just extend the banding of existing Countil Tax to charge a lot more to people in much bigger houses, as you would expect. But it would need to be done in such a way that it avoids catching e.g. pensioners who happen to live in a house that is very valuable now compared with when they bought it.

Increasing Council Tax is probably one of the few ways of taxing the rich more without just driving them overseas. It also can't be avoided, unlike most other taxes on the rich, which they just side-step.

My main worry though is that the Uk is rapidly changing from a business-friendly, wealthy-friendly enterprise country, into a Socialist mess where the rich are once again resented & driven out by repeated tax rises, etc.

Remember that Thatcher actually increased the tax take of the top band of income tax by actually REDUCING the percentage from 60% to 40% - this was a level that the rich were prepared to pay, whereas 60% wasn't - they just avoided it through loopholes, etc, or just left the country altogether.

Thank God Labour will be out next year. If it wasn't for that, I reckon a lot more people would be leaving & taking their money with them.

But as regards an increase in Council Tax on over £1m homes, I think that seems eminently sensible, given the desperate need to raise more tax revenue.

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I agree with Ben Tylers comments and support the view that the whole issue was taken out of context.

I don't hold VInce Cable in any high esteem , but I do see him as a straight talking common-sense politician.

People in million pound plus houses should pay higher taxes if the ratio with the lower bandings is to be fair.

Those in such houses who cannot afford to pay should be able to have the charges deferred to their estate or, if this is not acceptable, move.

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The fair way to raise revenue is though income tax, not property taxes. If they wish to increase the proportion of tax paid by higher earners, then they should introduce bands with progressively higher rates of income tax.

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Those whom the gods wish to destroy first make promising.

For Blair it was Iraq; for Kinnock it was a shouted "Yeah!"; for Mandy it was an undisclosed loan; for Thatcher it was the poll tax; and now for Vince it's the Mansion tax.

Shame really.

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Vince Cable has consistantly put forward sensible, practical, logical ideas to extricate the Country from the morass it is sinking into.

His biggest problem is that they are all brilliantly workable and efficient.

His fellow polititians are a devious bunch so anything which is uncomplicated is questioned on the grounds that it is too simple and if the idea was any good they would have thought of it first.

As for the merits of the mansion tax I think it is eminently suitable. You can only collect tax from people who have the ability to pay.

and also his proposals would have an exponential effect by not collecting tax on those earning less than £10,000

Apart from the economics there are votes to won by virtue of the fact that there are far more basic wage earners than there are millionaires.

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So where do they stand? Not long ago it was their policy to SCRAP council taxes and replace them by a local income tax.

House values are meanlingless until you sell them and trade down, thus releasing cash. And then the price depends on a willing buyer.

Why stop at taxing houses? Why not tax Rolex watches, private boats, expensive cars, horses, purebred pets and any other "luxury" the wealthy may buy. This would all go down well with the borrow more and spend more brigade who got us into this mess by spending other people's money they could never repay, and the bankers just got in on this greed and helped themselves to a slice on the way.

We need to encourage the preservation of wealth, not destroy it.

Too many people in Britain think that anyone else better off than themselves should be taxed until they squeal (Dennis Healey).

No account is taken of the different spending/saving habits. And many people who live in £1m plus houses will have a large mortgage, so the house value is not necessarily an indicator of actual wealth. In fact thos same people will have taken a huge equity hit over the last couple of years !

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We live a few doors away from Vince and, from everything I see, both locally and nationally he is everything a politian should be and more.

I don't know how he could be questioned for his loyalty to his constituency as he has incredible interest and active participation in the local community. He has also gone beyond the call of duty many times to help people locally, including friends of ours.

Why do the press always knock people down eventually? The journalists should look at them selves!

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Vince, the Liberals and Labour have got their priorities completely arse about face.

Its interesting that we are paying over £450 MILLION A DAY in debt interest and all Vince can come up with to reduce this country's humungus debt burden is to increase taxes.

Before stuffing anyone, rich or poor, with more taxes how about cutting say £50 Billion from quangos.

How about saving Billions by cancelling ID cards immediately.

How about saving Billions by sacking the thousands of non-jobs created by Gordon, for example bin inspectors, gender advisers, traveller support advisers, out reachers, etc etc etc

It has been suggested that probably £100 billion could be cut without sacking one fronline teacher, nurse, doctor, real copper (not the plastic ones) fireman, road sweeper or park warden.

If Vince had any real guts he should be saying he and the Liberals will introduce no more new taxes or tax rises until at least £100 billion is cut from public spending.

Its called sharing the pain with thousands of private sector workers who have lost jobs.

Having got his priorities right I might only might just vote Liberal.

The problem is Gordon used taxes to buy public sector votes and he is now borrowing like mad to keep these votes in a job until next year.

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If you have not seen it watch Vince being demolished by Andrew Neil on BBC News Hardtalk. The point is that Vince has been wrong on almost everything but shifts his position and no-one remembers, apart from Brillo's researchers.

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The whole tax system is a mess and needs a radical overhaul.To ceate a new 'mansion tax' would mean a new taxation statute and a new department to collect it. More bureaucracy and collection costs. Given that the minimum aim is not to increase complexity, then the logical route is to increase the number of bands in the existing Council tax system.

Alternatively, replace Council tax by a local Income tax based on a locally chosen percentage of each resident's income tax bill. This would be simple to operate and would pass power and accountability back to the local authority.

Stan Rosenthal

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Having an expensive house does not mean having a lot of money.

We bought our house over 30 years ago before the M40 was built and when it took over an hour to get to Heathrow.

Now widowed and a pensioner of no great means, should I be penalized because the South East is now popular and has put the price of my 4 Bed/Detached to within kissing distance of 1 million (pre credit crunch).

I just want to spend the rest of my life in the village I call home; near the people I know and the services, such as doctor, hairdresser, that I need.

Getting older makes travel more difficult. Moving to a cheaper location would remove me from my friends and social life. I already make sacrifices to pay the unfair council tax. For all the aforementioned reasons, must I now be dismissed as unworthy of consideration because we were lucky/clever enough to make good choices all those years ago.

Unless the proposed tax was punitive, the money raised would probably be wiped out by administration costs.

As a great admirer of Vince Cable I can only think that he hasn't thought it through or been in full possession of all the facts.

Think again Vince. You can do better.

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TERRY

Sep 28, 2009 at 09:29

Taxing property is socialist clap trap and I don't live in a million pound house. A further tax if you own a big car. How about a 80% tax on pensions over £40,000 ? Don't think Cable would agree with this.

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