Why Labour will reverse Cameron’s top rate tax cut

The latest figures from HMRC show that people earning over £150,000 paid almost £10bn more in tax in the three years when the 50p rate was in place. We need to get the deficit down in a fair way.

The Tories like to fix the facts to fit the story they want to tell. Only yesterday we saw them desperately pull together dodgy figures to make the ludicrous claim that people are better off under them, despite overwhelming evidence to the contrary. It only served to show just how out of touch they are.

It’s similar to what they’ve done when it comes to the 50p tax rate. David Cameron and George Osborne are desperate to be able to claim the 50p tax raised as little money as possible. That makes it easier for them to justify giving a tax cut to millionaires at a time when ordinary families are facing a cost-of-living crisis. But the decision to cut the 50p rate was a highly political decision, driven not by the evidence but by David Cameron and George Osborne’s desire to give the richest people in our country a tax cut.

The Tory-led government’s own assessment claims the cost of cutting the rate to 45p, excluding all behavioural changes, was over £3bn. To justify the tax cut the Tories argue that most of this potential revenue would be lost as a result of tax avoidance.  But crucially, the scale of the behavioural impact has been decided by Ministers, not HMRC. And latest figures from the HMRC show that people earning over £150,000 paid almost £10bn more in tax in the three years when the 50p rate was in place than was estimated at the time when the government did its assessment back in 2012.

The Tories also claim that tax revenues rose after they cut the top rate of tax. But the ONS and OBR have both said that many of the highest earners moved income and delayed bonuses by a year after George Osborne’s 2012 Budget in order that they could benefit from the lower top rate of tax. This shifting of income will actually have cost the Treasury millions of pounds in lost revenue.

Labour has been clear that when the deficit is high and ordinary families are seeing their real incomes fall, it simply can’t be right for David Cameron and George Osborne to give the richest people in the country a massive tax cut. So the next Labour government will make changes to create a fairer tax system. That means cracking down on tax avoidance, scrapping the shares for rights scheme and reversing the tax cut for hedge funds. We want a lower 10p starting rate of tax, which would help make work pay and cut taxes for 24 million people on middle and lower incomes.

And in order to ensure that those with the broadest shoulders bear a fairer share of the burden, Ed Balls has today announced that the next Labour government will reverse the Tory top rate tax cut in the next Parliament while we are finishing the job of getting the deficit down.

This is a fairer way to reduce the deficit. And the Tories will have to explain why the richest one per cent of earners should get a tax cut while tough times continue for everyone else.

Shabana Mahmood is shadow exchequer secretary

David Cameron speaks at the World Economic Forum in Davos yesterday. Photograph: Getty Images.

Shabana Mahmood is Labour MP for Birmingham Ladywood.

Photo: Getty
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Rising crime and fewer police show the most damaging impacts of austerity

We need to protect those who protect us.

Today’s revelation that police-recorded crime has risen by 10 per cent across England and Wales shows one of the most damaging impacts of austerity. Behind the cold figures are countless stories of personal misery; 723 homicides, 466,018 crimes with violence resulting in injury, and 205,869 domestic burglaries to take just a few examples.

It is crucial that politicians of all parties seek to address this rising level of violence and offer solutions to halt the increase in violent crime. I challenge any Tory to defend the idea that their constituents are best served by a continued squeeze on police budgets, when the number of officers is already at the lowest level for more than 30 years.

This week saw the launch Chris Bryant's Protect The Protectors Private Member’s Bill, which aims to secure greater protections for emergency service workers. It carries on where my attempts in the last parliament left off, and could not come at a more important time. Cuts to the number of police officers on our streets have not only left our communities less safe, but officers themselves are now more vulnerable as well.

As an MP I work closely with the local neighbourhood policing teams in my constituency of Halifax. There is some outstanding work going on to address the underlying causes of crime, to tackle antisocial behaviour, and to build trust and engagement across communities. I am always amazed that neighbourhood police officers seem to know the name of every kid in their patch. However cuts to West Yorkshire Police, which have totalled more than £160m since 2010, have meant that the number of neighbourhood officers in my district has been cut by half in the last year, as the budget squeeze continues and more resources are drawn into counter-terrorism and other specialisms .

Overall, West Yorkshire Police have seen a loss of around 1,200 officers. West Yorkshire Police Federation chairman Nick Smart is clear about the result: "To say it’s had no effect on frontline policing is just a nonsense.” Yet for years the Conservatives have argued just this, with the Prime Minister recently telling MPs that crime was at a record low, and ministers frequently arguing that the changing nature of crime means that the number of officers is a poor measure of police effectiveness. These figures today completely debunk that myth.

Constituents are also increasingly coming to me with concerns that crimes are not investigated once they are reported. Where the police simply do not have the resources to follow-up and attend or investigate crimes, communities lose faith and the criminals grow in confidence.

A frequently overlooked part of this discussion is that the demands on police have increased hugely, often in some unexpected ways. A clear example of this is that cuts in our mental health services have resulted in police officers having to deal with mental health issues in the custody suite. While on shift with the police last year, I saw how an average night included a series of people detained under the Mental Health Act. Due to a lack of specialist beds, vulnerable patients were held in a police cell, or even in the back of a police car, for their own safety. We should all be concerned that the police are becoming a catch-all for the state’s failures.

While the politically charged campaign to restore police numbers is ongoing, Protect The Protectors is seeking to build cross-party support for measures that would offer greater protections to officers immediately. In February, the Police Federation of England and Wales released the results of its latest welfare survey data which suggest that there were more than two million unarmed physical assaults on officers over a 12-month period, and a further 302,842 assaults using a deadly weapon.

This is partly due to an increase in single crewing, which sees officers sent out on their own into often hostile circumstances. Morale in the police has suffered hugely in recent years and almost every front-line officer will be able to recall a time when they were recently assaulted.

If we want to tackle this undeniable rise in violent crime, then a large part of the solution is protecting those who protect us; strengthening the law to keep them from harm where possible, restoring morale by removing the pay cap, and most importantly, increasing their numbers.

Holly Lynch is the MP for Halifax. The Protect the Protectors bill will get its second reading on the Friday 20th October. 

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