Mansion tax 'would be permanent levy'

Senior Liberal Democrats are demanding that a 'mansion tax' be a permanent levy on the rich.

They are ready to strike a deal with George Osborne over axing the 50p top rate of income tax in the next few years if it is replaced by another £3 billion wealth levy.

They are insisting on such an agreement if the 50p rate is ditched before the starting threshold for income tax is raised to £10,000 to help the less well-off.

Tory MPs will be alarmed at calls for Business Secretary Vince Cable's proposed tax of one per cent on homes worth more than £2 million to be permanent. Mr Osborne has argued the 50p rate was inherited from Labour as a temporary tax.