Osborne rules out 'mansion tax'

Chancellor George Osborne has flatly ruled out a "mansion tax" on properties over £2 million, in a blow to the Lib Dems.

The Lib Dems have long argued for the levy - saying it is better to tax wealth than earnings - but Mr Osborne warned that it would quickly spread to "more modest" homes.

He told the Mail on Sunday:

We are not going to have a mansion tax or a new tax that is a percentage value of people's properties. 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.

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Cameron signals further cuts

The Conservative Party's annual conference opened in Birmingham today. David Cameron ruled out the 'mansion tax' saying this 'not going to happen.' He also signalled that additional benefit cuts would be necessary to fight the deficit.