Osborne refuses to rule out cutting top tax rate to 40%

Despite being repeatedly pressed by Ed Balls at Treasury questions, the Chancellor refuses to comment on whether the Tories want to reduce the top rate from 45 per cent to 40 per cent.

After the growth figures released this morning, George Osborne was always likely to enjoy his bout with Ed Balls at today's Treasury questions. So loud was the roar from the Conservative benches when Balls stood up that the Speaker was forced to interject immediately, assuring them "you've got the man at the box for whom you were waiting".

Once the Tories had settled down, Balls began his question by noting that "after three damaging years of flatlining", today's growth figures were "welcome" (prompting another roar), before challenging Osborne on the "dodgy figures" used last week to claim that living standards were rising. Osborne, in full assassination mode, welcomed the "very important Labour economic announcement" that Balls will remain "in his job" and declared, "what they need on the other side of the House is new crystal balls". As Tory MPs guffawed, an unamused shadow chancellor replied: "very good, very good, Chancellor, a joke about my name being called Balls, fabulous."

After his announcement at the weekend that Labour would reintroduce the 50p rate tax if elected, he then invited Osborne to rule out a further reduction in the rate to 40p after 2015. He said:

Let me ask the Chancellor about the one thing that he has refused to talk about now for four days. He's delivered one massive tax cut for the richest one per cent earning over £150,000 when everybody else is worse off. The Prime Minister and the Mayor of London are now saying that they want to cut the top rate of income tax again to 40p. Is that really the Conservative Party priority? If this Chancellor still believes "we're all in this together", why won't he stand up at this despatch box now and rule out another top rate tax cut from the Conservatives in the next Parliament? Come on, George, stand up and rule it out.

To this, Osborne offered a lengthy response but notably refused to even come close to ruling out another tax cut. He said:

I'll tell you the big tax cut in this parliament, it's for working people by increasing the personal allowance to £10,000. And what is clear after the last week, is that the shadow chancellor has learned absolutely nothing from the economic mess that he brought upon this country. He said Labour should have spent more money in the boom, he set out fiscal plans that would allow billions more of borrowing, and on the top rate of tax, he announced a plan that was attacked by the Labour ministers he served in government with, by the people who lend the Labour Party money, by credible business people across the country, and the costings he produced were shot down by the Institute of Fiscal Studies last night. There couldn't have been a more disastrous policy launch in the history of the modern Labour Party. And on the day that we've learned that our economy continues to grow, isn't it clear that the anti-business Labour Party is now the biggest risk to the economic recovery.

A verbose answer, as I said, but not a word on whether the top rate will be reduced again (despite loud heckling by Balls). By refusing to rule out another "millionaire's tax cut", Osborne is handing Labour a new election attack line. Not only will Labour be able to remind voters that the Tories cut taxes for the highest 1 per cent of earners, it will be able to warn them that they're prepared to do the same again. Whether or not this is good economics (and there is no evidence that a 50p rate would genuinely damage growth), it is terrible politics. As a YouGov poll reminds us today, the public overwhelmingly support the 50p rate, with 61 per cent in favour and just 26 per cent opposed. By 45 per cent to 19 per cent, they believe it will help the economic recovery rather than damage it, and, by 50 per cent to 29 per cent, that it will raise additional revenue.

Osborne is often accused of being solely influenced by political calculations, but on this issue he is allowing ideology to trump all.

George Osborne at the World Economic Forum in Davos last week. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Scottish voters don't want hard Brexit - and they have a say in the future too

Leaving the single market is predicted to cost Scottish workers £2,000 a year,

After months of dithering, delaying and little more than scribbled notes in Downing Street we now know what Theresa May’s vision for a hard Brexit looks like. It is the clearest sign yet of just how far the Tories are willing to go to ignore the democratic will of the people of Scotland.  
 
The Tories want to take Scotland out of the single market - a market eight times bigger than the UK’s alone - which will cost Scotland 80,000 jobs and cut wages by £2,000 a year, according to the Fraser of Allander Institute.
 
And losing our place in the single market will not only affect Scotland's jobs but future investment too.
 
For example, retaining membership of, and tariff-free access to, the single market is crucial to sustainability and growth in Scotland’s rural economy.  Reverting to World Trade Organisation terms would open sections of our agricultural sector, such as cattle and sheep, up to significant risk. This is because we produce at prices above the world market price but are protected by the EU customs area.
 
The SNP raised the future of Scotland’s rural economy in the House of Commons yesterday as part of our Opposition Day Debate - not opposition for opposition’s sake, as the Prime Minister might say, but holding the UK Government to account on behalf of people living in Scotland.
 
The Prime Minister promised to share the UK Government’s Brexit proposals with Parliament so that MPs would have an opportunity to examine and debate them. But apparently we are to make do with reading about her 12-point plan in the national press.  This is unacceptable. Theresa May must ensure MPs have sufficient time to properly scrutinise these proposals.
 
It is welcome that Parliament will have a vote on the final Brexit dea,l but the Prime Minister has failed to provide clarity on how the voices of the devolved administrations will be represented in that vote.  To deny the elected representatives of the devolved nations a vote on the proposals, while giving one to the hundreds of unelected Lords and Ladies, highlights even further the democratic deficit Scotland faces at Westminster.  
 
The Scottish government is the only government to the UK to publish a comprehensive plan to keep Scotland in the single market - even if the rest of the UK leaves.
 
While the Prime Minister said she is willing to cooperate with devolved administrations, if she is arbitrarily ruling out membership of the single market, she is ignoring a key Scottish government priority.  Hardly the respect you might expect Scotland as an “equal partner” to receive. 
 
Scotland did not vote for these proposals - the UK government is playing to the tune of the hard-right of the Tory party, and it is no surprise to see that yesterday’s speech has delighted those on the far-right.
 
If the Tories insist on imposing a hard Brexit and refuse to listen to Scotland’s clear wishes, then the people of Scotland have the right to consider what sort of future they want.
 
SNP MPs will ensure that Scotland’s voice is heard at Westminster and do everything in our power to ensure that Scotland is protected from the Tory hard Brexit. 

 

Angus Robertson is the SNP MP for Moray, the SNP depute leader and Westminster group leader.