Lib Dems would be happy to vote with Labour on £2million mansion tax, reveals Vince Cable

• Vince Cable suggested Lib Dems would be happy to ditch loyalty to coalition
• Labour leader Ed Miliband adopted a form of mansion tax last week

By Jason Groves for the Daily Mail

Published: 20:37 EDT, 17 February 2013 | Updated: 20:57 EDT, 17 February 2013

Provacative idea: Vince Cable says that Lib Dem ministers may join forces with Labour in a Commons vote calling for a mansion tax

Liberal Democrat ministers may join forces with Labour in a Commons vote calling for a £2million mansion tax, Vince Cable revealed yesterday.

The Business Secretary’s provocative suggestion – which could split the Coalition – came as it emerged that the Lib Dems are considering widening the scope of their mansion tax proposals to include second homes and buy-to-let properties.

This would mean that voters would be taxed on property portfolios worth above £2million and could dramatically widen the number of households liable to the annual 1 per cent levy.

The policy is seen as being helpful for the Lib Dems in the South West of England where the party is traditionally strong and which has a high number of second homes.

According to the 2011 Census, 1.57million people living in England and Wales have a second address in another local authority area.

Mr Cable, seen as a likely broker of a future Lib-Lab pact, suggested his party’s MPs would be happy to ditch their loyalty to the Coalition to vote for their cherished policy.

A form of mansion tax was adopted last week by Ed Miliband as a way of funding Labour’s sudden commitment to reintroducing the 10p tax band for the lower paid.

But Mr Cable said it was ‘a policy whose time has come’ and welcomed indications that the Labour leader had ‘seen sense’ on the issue.

Mr Miliband has said he will stage a Commons vote on the tax in the coming weeks in an attempt to split the Coalition and increase pressure for it to be brought in.

If Lib Dem MPs vote with Labour the Government could suffer a rare, and highly embarrassing, Commons defeat.

It would not automatically result in the introduction of the new tax, but would damage already tense relations between the Coalition partners.

Policy: A form of mansion tax was adopted last week by Ed Miliband as a way of funding Labour¿s sudden commitment to reintroducing the 10p tax band for the lower paid

Mr Cable said his party’s support would depend on Mr Miliband being ‘sensible’ about the idea and not playing ‘political games’ by dragging in wider issues, such as Labour’s new plan to partly reintroduce the 10p tax rate using the proceeds of the mansion tax.

Asked if the Lib Dems would support Labour in a Commons vote, Mr Cable told Sky News: ‘It depends entirely how they phrase it. If it is purely a statement of support for the principle of a mansion tax I’m sure my colleagues would want to support it.’

Lib Dem proposals for a mansion tax would place an annual 1 per cent levy on homes worth more than £2million. Owners would pay the tax on the value of their home above £2million.

Now, a policy paper prepared for the party leadership suggests it could be extended to cover total property holdings, potentially dragging in many families with second homes.

Last week, Labour said 70,000 families could be hit by a levy on properties worth £2million or more. But if it was extended to cover those with buy-to-let investments and second homes it could hit many more voters.

Mr Cable played down suggestions that the tax would be extended, saying the priority was to get it introduced.

David Cameron has vetoed repeated Lib Dem calls to impose a mansion tax, warning that it would be unfair on people who happen to live in wealthy areas.