What’ll be the political fall-out?

All the signs are that a deal has been done by the coalition partners to scrap the 50p tax rate and that there’ll be some form of mansion tax. It’s suggested that the latter might be in the form of more council tax bands at the top for the most expensive dwellings.

Already Ed Miliband has started attacking the plan saying that the new property tax, whatever its called, shouldn’t be used “as an excuse” to abandon the 50p rate which was first introduced in the closing months of the Labour government.

There’s a developing argument for saying that the 50p rate can lead to the overall tax take being lower because those at the very top can find ways of legally avoiding it. Abandoning the rate would, if that is indeed the case, lead to more money coming in.

This looks as though it will be the defining split between Labour and the coalition.

The idea of the rich apparently being treated in this way is going to be a hard sell and a possible easy target for Labour.

I’m not sure, however, that the party’s main spokesman are up to the task of exploiting it. The shadow chief treasury secretary, Rachel Reeves, was less than convincing on the point during her Question Time appearance last Thursday. She has a diction issue – a bit like Ed Miliband – which makes it harder for her to get her points across.

@MikeSmithsonOGH