'Back mansion tax' plea to Osborne

A Liberal Democrat peer called on Chancellor George Osborne to implement the party's mansion tax proposal, saying: "Go for our mansion tax and I promise I won't attack you for selective moral outrage."

Lord Oakeshott told party members at their autumn conference in Brighton that the mansion tax plan was the Lib Dem "big bazooka" which would tackle the "inequality which stains the face of Britain".

Under the proposal an annual mansion tax would be charged at 1% a year on the amount of the excess value of any residential property over £2 million.

He said: "There's only one way to tax the wealthy tax dodgers, non-doms, non-residents, rich Britons who hide their wealth in trusts or tax havens, tax the mansions they can't sneak offshore."

The tax, he added, would target one in 200 properties, heavily concentrated in the richest parts of London which were fast becoming "islands of opulence cut off from the rest of the country".

It could raise £2.5 billion following the "explosion" in property prices in central London.

Hitting out at his Coalition partners, Lord Oakeshott said: "Our Conservative colleagues in Government say tax evasion and aggressive tax avoidance are repugnant - fine words, but only of course if you are Jimmy Carr, not if you're a big Tory donor."

He added: "We got close to getting our mansion tax through in last year's Budget, so I'm offering you a deal for this year, George. Go for our mansion tax and I promise I won't attack you for selective moral outrage.

"Like saying tax dodging is morally repugnant unless you bung the Tories £50,000."

The proposal was backed by Lib Dem members as an additional amendment to its agreed motion on tackling inequality at its roots which proposes the introduction of a capabilities index and a life chances indicator to measure the obstacles that inequality creates.