Support 100 years of independent journalism.

  1. Politics
21 March 2012updated 07 Sep 2021 11:27am

The 50p tax cut will retoxify the Tory brand

Osborne has rewarded the "morally repugnant" tax avoidance he condemned elsewhere.

By George Eaton

As I noted before Ed Miliband did, there was one phrase conspicuously absent from George Osborne’s Budget: “we’re all in this together”. The Chancellor’s heavily-trailed decision to reduce the 50p tax rate to 45p means this saccharine phrase has been banished from the Tory lexicon. This was a tax cut for the one per cent.

Osborne’s stated justification for reducing the top rate – that it has raised a third less than expected – will appear odd to voters, the majority of whom support it. If the 50p rate is bringing in less than expected, it’s because of tax avoidance. But this isn’t an argument for scrapping the rate, it’s an argument for clamping down on tax avoidance. Elsewhere in his statement, Osborne declared that aggressive tax avoidance was “morally repugnant”, so why is he rewarding it?

The Budget leaks meant Miliband had more time than usual to prepare – and it showed. His response was the strongest from any opposition leader in recent history. In a memorable piece of political theatre, he asked the frontbench to raise their hands if they benefited from the 50p cut. “Same old Tories” was the line he repeated again and again. Polls show that David Cameron is still seen as out of touch and Osborne’s tax cut provided Miliband with a perfect opportunity to prove as much. The Chancellor may claim that his Budget will raise “five times more” from the wealthy but none of the measures he announced, among them a 2 per cent rise in stamp duty for £2m properties, possess the symbolic power of the 50p rate. Indeed, there was nothing sufficiently newsworthy in the Budget to stop tomorrow’s headlines declaring that the Chancellor has cut taxes for the richest. More than any other single measure, the end of the 50p rate could retoxify the Tory brand.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.