Borrowing figures show how Osborne allowed thousands to avoid 50p tax rate

The spike in tax receipts was caused by individuals deferring income and bonuses to benefit from the new 45p rate, not a surge in earnings.

The latest borrowing figures are being trumpeted by the Tories as evidence of the success of George Osborne's economic plan, with tax receipts up by 7% compared to last year. But what they won't mention is that this spike has more to do with high earners avoiding the 50p tax rate than it does with any rise in earnings. By deferring income and bonuses from 2012 until this year to take advantage of the new 45p rate, taxpayers have caused a £2.9bn increase in receipts. But with earnings growth of just 0.7% in the most recent month, it's far from certain that this improved trend will continue. 

As the OBR notes in its commentary on the figures: 

Growth in both income tax and NICs for the year-to-date is above the full year forecasts, but this largely reflects the fact that receipts in the first few months of the year benefited from the deferral of some income/bonuses to take advantage of the reduction of the additional rate of income tax to 45p and some temporary effects in non-PAYE income tax. Prospects for PAYE and NIC receipts growth will depend on the feed-through from the low growth in average weekly earnings in the latest data.
The IFS similarly warns
It is important to note that some of the strong growth in receipts observed earlier in the year may not be expected to persist for the rest of the financial year, as it may be the result of some high income individuals pushing part of their income from last year into the beginning of this tax year in order to take advantage of the reduction in the higher rate of income tax.
And with individuals paying tax at 45p, rather than 50p, the Exchequer is left out of pocket. Osborne's stated justification for abolishing the 50p rate was that, due to mass avoidance, it raised "just a third of the £3bn" expected. But while it's true that £16bn of income was shifted into the previous tax year  - when the rate was still 40p - this was a trick the rich could only have played once. And as the government has acknowledged on other occasions, tax avoidance isn't an argument for cutting tax, it's an argument for stopping avoidance. 
Having falsely claimed that the (anomalous) first year of the 50p rate proved that it was ineffective, the Tories are now using the (anomalous) first year of the 45p rate to argue that they were right to scrap it. We'll never know how much the 50p rate would actually have raised - and that is just as Osborne intended. 
Shadow chief secretary to the Treasury Chris Leslie said: "It’s significant that the OBR has pointed out that very high earners delayed their bonuses to take advantage of David Cameron’s top rate tax cut.

"While this artificially boosts this year’s borrowing figures, overall the Treasury will have lost millions of pounds as a result of the highest earners deferring income to pay tax at a lower rate."

"This is yet more proof that David Cameron stands up for the wrong people. While those at the top are reaping the benefits of a huge tax cut, ordinary people on middle and low incomes are seeing their living standards fall."

George Osborne speaks at the Conservative conference in Manchester last month. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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I'll vote against bombing Isis - but my conscience is far from clear

Chi Onwurah lays out why she'll be voting against British airstrikes in Syria.

I have spent much of the weekend considering how I will vote on the question of whether the UK should extend airstrikes against Daesh/Isis from Iraq to Syria, seeking out and weighing the evidence and the risks.

My constituents have written, emailed, tweeted, facebooked or stopped me in the street to share their thoughts. Most recognised what a difficult and complex decision it is. When I was selected to be the Labour candidate for Newcastle Central I was asked what I thought would be the hardest part of being an MP.

I said it would be this.

I am not a pacifist, I believe our country is worth defending and our values worth fighting for. But the decision to send British Armed Forces into action is, rightly, a heavy responsibility.

For me it comes down to two key questions. The security of British citizens, and the avoidance of civilian casualties. These are separate operational and moral questions but they are linked in that it is civilian casualties which help fuel the Daesh ideology that we cannot respect and value the lives of those who do not believe as we do. There is also the important question of solidarity with the French in the wake of their grievous and devastating loss; I shall come to that later.

I listened very carefully to the Prime Minister as he set out the case for airstrikes on Thursday and I share his view that Daesh represents a real threat to UK citizens. However he did not convince me that UK airstrikes at this time would materially reduce that threat. The Prime Minister was clear that Daesh cannot be defeated from the air. The situation in Syria is complex and factionalised, with many state and non-state actors who may be enemies of our enemy and yet not our friend. The Prime Minister claimed there were 70,000 ground troops in the moderate Free Syrian Army but many experts dispute that number and the evidence does not convince me that they are in a position to lead an effective ground campaign. Bombs alone will not prevent Daesh obtaining money, arms and more recruits or launching attacks on the UK. The Prime Minister did not set out how we would do that, his was not a plan for security and peace in Syria with airstrikes a necessary support to it, but a plan to bomb Syria, with peace and security cited in support of it. That is not good enough for me.

Daesh are using civilian population as human shields. Syrians in exile speak of the impossibility of targeting the terrorists without hitting innocent bystanders. I fear that bombing Raqqa to eliminate Daesh may be like bombing Gaza to eliminate Hamas – hugely costly in terms of the civilian population and ultimately ineffectual.

Yet the evil that Daesh perpetrate demands a response. President Hollande has called on us to join with French forces. I lived in Paris for three years, I spent time in just about every location that was attacked two weeks ago, I have many friends living in Paris now, I believe the French are our friends and allies and we should stand and act in solidarity with them, and all those who have suffered in Mali, Kenya, Nigeria, Lebanon, Tunisia and around the world.

But there are other ways to act as well as airstrikes. Britain is the only G7 country to meet its international development commitments, we are already one of the biggest humanitarian contributors to stemming the Syrian crisis, we can do more not only in terms of supporting refugees but helping those still in Syria, whether living in fear of Daesh or Assad. We can show the world that our response is to build rather than bomb. The Prime Minister argues that without taking part in the bombing we will not have a place at the table for the reconstruction. I would think our allies would be reluctant to overlook our financial commitment.

We can also do more to cut off Daesh funding, targeting their oil wells, their revenues, their customers and their suppliers. This may not be as immediately satisfying as bombing the terrorists but it is a more effective means of strangling them.

The vast majority of the constituents who contacted me were against airstrikes. I agree with them for the reasons I set out above. I should say that I have had no experience of bullying or attempts at intimidation in reaching this decision, Newcastle Central is too friendly, frank, comradely and Geordie a constituency for that. But some have suggested that I should vote against airstrikes to ensure a “clear conscience” ’. This is not the case. There will be more killings and innocent deaths whether there are UK airstrikes or not, and we will all bear a portion of responsibility for them.

A version of this article was originally sent to Chi Onwurah's constituents, and can be read here