My tax gift to Middle England: Osborne pledges NO mansion tax, NO wealth tax and FREEZE on council tax

Chancellor George Osborne announced the tax breaks in an exclusive interview with the Mail on Sunday

Wealth and mansion taxes ruled out, council tax frozen and rail fares capped in package worth £500 million



He said demands for a wealth tax were ‘the politics of resentment’

Move expected to anger Liberal Democrats who want the rich to pay more



George Osborne today vows to help hard-pressed middle-class families with a series of eye-catching tax breaks.



The Chancellor has emphatically ruled out any plans to impose ‘wealth taxes’ on high-earners, and pledged to freeze council tax and cap commuter fares in a package worth £500 million.



The move to rule out a wealth tax will delight the Tory Party faithful – but will infuriate their Liberal Democrat Coalition partners, who have warned that they will not sanction further austerity measures without fresh levies on the rich.



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Chancellor George Osborne said that while the economy is healing, there will have to be further cuts

In an exclusive interview with The Mail on Sunday, as the Conservatives gather for their party conference in Birmingham, Mr Osborne described the demands for a wealth tax as ‘the politics of resentment’.



And in an attempt to grab back the initiative on tax from Labour, he also announced the boost for hard-pressed homeowners and rail passengers.



Council tax is to be frozen for a third year in a row – a move worth £80 a year for the average Band D council tax payer – and rail fare rises will be limited to four per cent, worth £45 to the average season ticket holder.

David Cameron will this week strike a defiant tone by refusing to drop his ‘austerity Britain’ policies in an echo of Margaret Thatcher’s famous ‘the lady’s not for turning’ vow.



The Prime Minister will tell the conference that an economic U-turn would land Britain in the same mess as eurozone nations such as Greece and Spain.

Britain's Prime Minister David Cameron, left, and his wife Samantha arrive at their conference hotel in Birmingham last night

The refusal to countenance a wealth tax is likely to stun Nick Clegg’s Lib Dems, who believed that a tacit deal had been struck in which they would support further cuts in welfare and public spending in return for measures such as a ‘mansion tax’, under which owners of multi-million-pound houses would be hit by an annual levy.

At last month’s Lib Dem conference, Mr Clegg claimed there was now a ‘very considerable’ chance the Tories would agree to new wealth taxes.



Mr Clegg said: ‘I will not accept a new wave of fiscal retrenchment, of belt tightening, without asking people at the top to make an additional contribution.



'We have already illustrated through capital gains tax, through stamp duty, through tax avoidance and many other measures . . . the top ten per cent pay more and we can do more of that.’



But Mr Osborne insisted that forcing the rich to pay more tax as the best way to beat the slump was ‘complete economic delusion’ and argued that a mansion tax would quickly be extended to cover ‘more modest’ homes.



‘We are not going to have a mansion tax, or a new tax that is a percentage value of people’s properties,’ he said.



‘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.’



Likewise, adding a new council tax band for big houses was a ‘tax snoopers charter’.



He said: ‘You would have to send inspectors out and it wouldn’t raise much money. I’m not going to let the tax inspectors get their foot in the door.’



Rail commuters will benefit from a cap on fares, worth around £45 to the average season ticket holder

Mr Osborne hit back at Labour leader Ed Miliband for branding the Conservatives ‘the millionaires’ party’ and calling on the Government to abandon its ‘austerity’ package of cuts.



He said he would not ‘flinch’ from his tough programme of measures.

Changing the Government’s economic policies would have dire consequences, he said. ‘Western countries face a simple choice: Are they going to sink or swim?



'There will be lots of countries, neighbours of ours, who are going to duck difficult choices. In 20 or 30 years’ time they will be much poorer.’



Mr Osborne refused to say when he expected the recession to end, saying: ‘The economy is healing. But it’s a longer and harder road that we have to travel down. There will have to be further cuts.’



Mrs Thatcher’s ‘the lady’s not for turning’ declaration was made at the Tory conference in 1980.



She had been in power for just over a year and was under fire over her tough monetarist policies as unemployment soared. It was a pun on the title of the play The Lady’s Not For Burning by Christopher Fry.



'We are clearing up the mess Ed Miliband and Ed Balls created when they were in this very room', says Osborne in candid interview



George Osborne, like the rest of the nation, faces a tough choice tonight. Will he and his wife Frances at 9pm sit down to watch Downton Abbey or Andrew Marr’s History Of The World?



At their home in No 10 Downing Street he has come up with an unusual solution. ‘My wife and I normally watch Sunday TV together, but I’m watching Marr in one room and she’s watching Downton in the other,’ he says.



Ever the political strategist, George Osborne realises this may upset Conservative peer Lord Fellowes, the creator of Downton. ‘Julian Fellowes will get p***** off if I say I am watching Marr so I should say I am sure I will watch the box set of Downton Abbey!’ he half-jokes.

Speaking out: Chancellor George Osborne talks to Mail on Sunday Editor Geordie Greig and Political Editor Simon Walters

Wealth has become a thorny issue for the Tories. When pollsters ask focus groups which television programme they associate with the party, back comes the reply, Downton Abbey.

David Cameron’s favourite think tank, the Policy Exchange, admits the Tories are still seen as ‘the party of the rich’.



A new survey showed seven out of ten oppose Osborne’s cut in the top tax rate to 45p. Ed Miliband says the Tories are ‘the millionaires party’ and Nick Clegg wants a tycoon tax and mansion tax.



And the foul-mouthed rant at a Downing Street policeman by Osborne’s friend and ally, Rugby School-educated Chief Whip Andrew Mitchell, has done little to counter the wounding jibe that the Tory Cabinet is dominated by ‘arrogant posh boys’.

George Osborne said the Tories are on the side of the aspiring classes

But defiant Osborne dismisses calls to squeeze the rich as ‘the politics of resentment’.



One by one, he flatly rules out every form of wealth tax, tycoon tax, mansion tax, a new council tax band, property tax or land tax.



Today’s mansion tax is tomorrow’s raid on a four-bedroom house in a leafy suburb, he suggests.

‘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,’ he says.



‘We don’t think people who have worked hard, saved up to buy a home, should be clobbered with a mansion tax.’



Adding a new tax band to the council tax for big homes is merely a sinister ploy to let tax snoopers get into people’s homes, he maintains.



‘You would have to send inspectors out [to revalue every home in the UK] and it wouldn’t raise much money,’ he says. ‘I’m not going to let the tax inspectors get their foot in the door.’



Osborne warms to his theme: ‘Nor will there be a wealth tax or annual tax on assets, temporary or otherwise. It is completely unenforceable. It would become a tax avoider’s charter.



‘We want to encourage wealth creators and make Britain a place where people want to invest. It is a complete economic delusion for Labour to say we are just going to tax the rich and that will deal with Britain’s problems – and the country knows it. It is not a them and us situation.’



As Miliband last week tried to steal the Tories’ clothes with his newly minted One Nation slogan and the adoption of Disraeli as a political hero, Osborne is just as happy to steal a traditional Labour position by claiming it is the Tories who get the wealthy to pay more.



Far from being the millionaires’ friend, Osborne insists the rich are already paying more tax under the Tories as a result of the rise in stamp duty and cuts in tax reliefs.



And he is not moved by Labour’s taunt that cutting the top 50p rate means the Tories are handing an extra £40,000 a year to millionaires. Putting it back up to 50p would hit the poor, not the rich, says the Chancellor.

The Chancellor, right, refused to comment on claims he has rowed with the Prime Minister, left, over tax

‘Blair and Brown understood the 50p tax rate would not do any good because they didn’t introduce it until the packing cases were being sorted out in Downing Street for Brown to leave.



'The 50p tax rate allows Ed Miliband and Ed Balls to say, “We charged the 50p rate” even though they know it raises no money, costs jobs and investment and the people who suffer are not the richest but the poorest who cannot get jobs.’



No Tory is more sneering towards Labour than Osborne.



Sitting in a high-ceilinged drawing room in the Treasury supported by a staff of more than 1,500 bean-counters, he says: ‘We are cleaning up the mess Ed Miliband and Ed Balls created when they were in this very room.’



And there will be no let-up in Osborne’s war on welfare scroungers. ‘We are not going to balance the budget on the backs of the poorest and those with broadest shoulders must make the biggest contribution, but there’s no fairness in a welfare system where working people earn less than those who stay at home and aren’t working,’ he says.



‘I think about the person leaving home when it’s dark to work long hours, leaving before the kids are even up. They walk out of the house, look at the next door neighbour, blinds pulled down, who’s living on benefits.’

'I'm incredibly proud of my family. I want everyone to have the kind of education I had. I want everyone to have those things that I was lucky enough to enjoy as a child.'



If the Government gives in to siren calls to abandon his stringent economic medicine, Britain will face the same bankruptcy that threatens to engulf fellow EU nations such as Greece, Spain, Portugal, Ireland and possibly France.



He doesn’t actually name the countries, but he doesn’t need to.



‘Western countries face a simple choice: Are they going to sink or swim? There will be lots of countries, neighbours of ours, not too far away from where we’re sitting, who are going to duck difficult choices.



'In 20 or 30 years’ time they will be much poorer and the world they leave to their children will be considerably worse than the one they inherited. I just don’t want that to be this country.’



Wary of making the same ‘green shoots of recovery’ prediction that made a laughing stock of another Tory Chancellor in a similar predicament, Norman Lamont, he will only say: ‘The economy is healing.’

He adds sternly: ‘But it’s a longer and harder road that we have to travel down. There will have to be further cuts.’



The continuing slump has seen Osborne’s ratings disappear off the bottom end of the scale.



London’s St Paul’s School, Oxford and the Bullingdon Club have left an indelible mark on his image.



Cartoonists portray him as a bumbling Regency fop. Earlier this year, his father, Sir Peter, gave an interview in which he revealed his expensive tastes including a £19,000 Italian desk.



But Osborne refuses to apologise for his privileged background: ‘I’m incredibly proud of my family.



'I want everyone to have the kind of education I had, for everyone who wants to set up a small shop like my mother ran, or a manufacturing business, like my father built up, to be able to do that. I want everyone to have those things that I was lucky enough to enjoy as a child



‘I’m not like Labour politicians who are resentful or mark people out by their background. We are on the side of the aspiring classes.’

Star attraction: The Chancellor took his wife to see Keira Knightley in Anna Karenina

He derides Miliband for targeting Old Etonian Cameron by parading his own comprehensive school roots. ‘If the only thing you can say about the British Prime Minister is where he went to school, you aren’t serious.’



Osborne’s priority, he says, is tackling ‘high tax rates and unaffordable welfare systems’. He was about to include ‘lousy’ schools in his list.



However, apparently fearing headlines of ‘lousy state schools by posh boy Osborne’, he quickly corrected it to ‘…schools that are not performing’.



His rock bottom popularity ratings were borne out by boos when he attended the Olympics. Osborne shrugs: ‘If you got cheered for making unpopular decisions, something very odd would be going on.’



Does he have any ‘wake up at 4am’ moments of anxiety? He replies without hesitation: ‘I will not flinch from the decisions necessary to deal with these problems or play to the gallery.’



He refuses to say if he would resign if he thought his unpopularity threatened to lose Cameron the next election. Nor will he comment on claims that there have been rows between them over tax.



‘If there are, I’m not going to tell you about them,’ he says.



So is there a soft side to our economic axe man? He cannot recall the last time he cried. ‘I’m not very weepy in movies.’



He saw Keira Knightley in Anna Karenina at his local cinema with his wife and is reading Sweet Tooth, Ian McEwan’s new novel set in 1972, the year before Osborne was born with a Tory government battling economic catastrophe.



He tries to protect his wife and two young children from the goldfish bowl of life in No 10. ‘We go to the cinema with the kids, go shopping. I work hard as a father to make sure their upbringing is not too unusual.



‘I can’t think of the last time anyone came up to me and was hostile or aggressive. Almost everyone who does says, “You have an incredibly difficult job and good luck with it”.’



He will need a lot more than luck.

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