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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Quiz: Can you identify fake news?

The furore around "fake" news shows no sign of abating. Can you spot what's real and what's not?

Hillary Clinton has spoken out today to warn about the fake news epidemic sweeping the world. Clinton went as far as to say that "lives are at risk" from fake news, the day after Pope Francis compared reading fake news to eating poop. (Side note: with real news like that, who needs the fake stuff?)

The sweeping distrust in fake news has caused some confusion, however, as many are unsure about how to actually tell the reals and the fakes apart. Short from seeing whether the logo will scratch off and asking the man from the market where he got it from, how can you really identify fake news? Take our test to see whether you have all the answers.

 

 

In all seriousness, many claim that identifying fake news is a simple matter of checking the source and disbelieving anything "too good to be true". Unfortunately, however, fake news outlets post real stories too, and real news outlets often slip up and publish the fakes. Use fact-checking websites like Snopes to really get to the bottom of a story, and always do a quick Google before you share anything. 

Amelia Tait is a technology and digital culture writer at the New Statesman.