Danny Alexander MP outlined this week his proposals for a Mansion Tax. In a speech on tax on Wednesday, Danny described some of the details of the tax, which would apply on homes worth over £2 million.

The Liberal Democrats first proposed our Mansion Tax in 2009 and have been pushing for it to be implemented in Government, against huge opposition from the Conservatives.

During his speech, Danny said:

“As a Liberal Democrat, we are committed to finishing the job fairly too.

That means that in the next Parliament the job can’t all be done through spending cuts alone. That is in sharp contrast to the Conservatives, who think this can all be done through spending cuts, and in particular that the working age poor should bear the burden.

It is perhaps unsurprising that in addition to inheriting the consequences of a full blown financial crisis we also discovered a tax system which was a mess.

Full of anomalies, and opportunities for those intent on avoiding paying their fair share – it had more holes than Swiss cheese.

I’ve already mentioned capital gains tax and pensions tax relief as two key areas where in coalition we have made some changes.

One of the other most obvious was, and is, council tax.

Let me put this proposition to you …

Someone in a £700,000 home should pay the same council tax as some living in a house worth 7 million or 17 million, or even 70 million.

How do you feel about this?

Most people would agree that it is not right.

Well, over the past couple of years I’ve done a lot of work in the Treasury thinking through a fair reform.

Vince Cable had already done much of the ground work, much of the heavy lifting.

But now, in the Treasury, modelling and analysis has been done, property data processed, to understand how this can be delivered.

And so the new system I, as a Liberal Democrat, am proposing is really simple –

A modest additional banded levy on top of council tax for high value properties.

The annual charges, in addition to council tax will be set out in good time ahead of the General Election next year.

By building on the council tax system, there will be no need for a detailed valuation of the small proportion of properties affected.

Crucially this means that this policy could be implemented quickly after the election.

And people in homes valued at below £2 million would continue to pay just council tax.

Let me be crystal clear – There would be no additional charge on homes valued below £2 million.

The new levy will be collected in the same way as council tax, via local authorities, then pooled nationally.

Of course there will be appeals, and of course these will be heard properly, as they are currently with council tax.

But with a simple banded structure,

And with the level of the bands up rated annually, people living in typical family homes need have no fear of being sucked into this levy.

So, just as with the increases to the income tax personal allowance, I think there’s widespread support for what is self evidently a fair correction to an outdated system.

Even our esteemed Mayor gruffly conceded that new council tax bands were – ‘the kind of thing you need to look at’.

Simple. Practical. Deliverable. Fair.”

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