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Osborne says the richest will have to pay more but rules out a mansion tax

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George Osborne ruled out a temporary wealth tax, and told the Conservative party conference today that he was not going to introduce ‘a new tax on people’s homes’.

Such a tax would be sold as a mansion tax, and ‘once the tax inspector has his foot in the door, you’ll soon find most of the homes in the country labelled a mansion,’ he said. ‘This party of home ownership will have no truck with it.’

Osborne said the government would continue its ‘ruthless pursuit’ of tax evasion, and make aggressive tax avoidance ‘more and more uncomfortable’. The government would take ‘new measures’ to collect more tax – the Conservatives were ‘the party of low taxes for the many, not the party of no taxes for the few’.

He told the conference: ‘If there are other ways to increase revenue from the very top, without damaging the enterprise economy, we will look for them.’

Capital gains tax and employment law

Osborne said the government would outline today proposals for a ‘radical change’ to employment law. Under a voluntary ‘three way’ deal, a company would give an employee shares in the business. The employee would replace rights of unfair dismissal and redundancy with ‘new rights of ownership’.

The government would charge ‘no capital gains tax at all’ on profits made by the employee on the shares. ‘Owners, workers and the taxman – all in it together,’ he said. ‘Workers of the world unite.’

Individuals liable to capital gains tax are already entitled to an annual exemption in respect of the first £10,600 of chargeable gains.

‘New taxes’

‘There will be new taxes on rich people in the year ahead’, Osborne said before he addressed the conference. ‘The rich need to contribute more, as they have in all my Budgets, but you can't just balance the budget on the wallets of the rich,’ he told James Naughtie on the Today programme.

Osborne added: ‘You've also got to look at government spending and you've got to look at welfare.’

Naughtie said some benefit claimants, including housing benefit claimants aged under 25, were going to be squeezed ‘very hard’. He asked: ‘How do you squeeze those who are rather better off, to make everyone share the pain?’

Osborne replied: ‘The rich are paying more and they will have to pay more. There will be new taxes on rich people in the years ahead. I’m not going to have taxes that destroy enterprise, I’m not going to have a wealth tax … It is a delusion to think that the only way you deal with a very large budget deficit and a very large debt is by increasing some taxes on the rich.’

‘We are not going to have a mansion tax, or a new tax that is a percentage value of people’s properties,’ Osborne said in an interview with the Mail on Sunday, published yesterday.