Property levies to fund cut in 50p tax rate

Taxes will be increased on expensive houses, allowing the government to fulfil its longer-term promise to scrap the 50p top income tax rate, Nick Clegg has said.

The Deputy Prime Minister said the top rate would be eliminated once people on lower middle incomes were "breathing more easily", but only if it was accompanied by a new tax regime for high-end properties, writes the Financial Times.

The Liberal Democrat leader told the FT: "A liberal tax system rewards work and enterprise and captures pollution and unearned wealth."

Clegg says the impending tax squeeze on the owners of big properties had gone almost unnoticed in George Osborne's Budget last week, a financial package that he said could have been written by the Liberal Democrats.

The Chancellor said in the Budget: "As well as reviewing revenues from the 50p tax rate, we will also be redoubling our efforts to find ways of ensuring that owners of high value property cannot avoid paying their fair share."