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  1. Politics
5 February 2014updated 12 Oct 2023 9:58am

Why Danny Alexander’s promise to keep the 45p tax rate can’t be trusted

The Lib Dems says the top tax rate will be cut "over my dead body". But he said the same about the 50p rate in 2011.

By George Eaton

Danny Alexander’s decision last week to attack Labour’s “borrowing bombshell” (a conspicuous echo of Conservative rhetoric) and to outline coalition spending totals until 2020-21 went down predictably badly with the Lib Dem left. Just three days before his intervention, Vince Cable had emphasised that his party was not bound to George Osborne’s post-2015 deficit reduction timetable: “There are different ways of finishing the job … not all require the pace and scale of cuts set out by the chancellor. And they could allow public spending to stabilise or grow in the next parliament, whilst still getting the debt burden down.” But Alexander’s willingness to join the Chancellor in a united front against Ed Balls appeared to confirmed the long-held suspicion that he has gone “native” at the Treasury (the joke runs that the Lib Dem man in the Treasury has become the Treasury man in the Lib Dems). 

In response, Prateek Buch, the co-chair of the Social Liberal Forum (and a Staggers contributor), said: “Cuts on the scale planned by Osborne just cannot be delivered. So why should Lib Dems endorse the Chancellor’s straitjacket? It is beyond me why Danny would sign up to what appears to be joint Lib Dem/Tory spending plans going beyond the end of the next parliament, when no such figures have been agreed by his own party. It is unhelpful to pre-empt the party’s manifesto process in this way. Besides, the plans take no account of the need to invest, or what will happen to GDP. What happened to differentiating ourselves from the Tories?”

Perhaps unsettled by this criticism, today finds Alexander seeking to put some clear yellow water between himself and his coalition partners. He tells the Daily Mirror that a cut in the 45p tax rate (which the Tories have repeatedly refused to rule out) will happen “over my dead body” and says of the claim that he has gone “native”: “If that’s what people think about me, then they are wrong. I am Liberal Democrat – full stop, end of story.” 

But given past form, don’t be surprised if Osborne ends up walking over Alexander’s corpse on his way to deliver the Budget. In July 2011, the Chief Secretary to the Treasury said of those calling for the abolition of the 50p tax rate: “The idea that we’re going to somehow shift our focus to the wealthiest in the country at a time when everyone’s under pressure is just in cloud cuckoo land”. But eight months later, Osborne did just that (while failing to introduce the mansion tax that the Lib Dems demanded in return). While there is no sign that the Tories are considering another reduction in the top rate in this parliament (in what would be a pre-election gift to Labour), it would be unwise to take Alexander’s word for it.

Asked about the subject on the Today programme this morning, Boris Johnson quipped that “the last thing I want to see is a pointless sacrifice from the Liberal Democrats, let alone the dead body of Danny Alexander” before hinting that the next Conservative manifesto would, at the very least, not commit to keeping the 45p rate. He said: “I can’t believe we’re going to go into an election with a tax rate so high.” Since it’s the Mayor’s brother, Jo Johnson (the head of the No. 10 policy board) who is responsible for the manifesto, he can be assumed to speak with some authority on this matter. Finally, asked whether Alexander could be thrown over board to allow a cut in the top rate, he intriguingly remarked: “stranger things have happened at sea”. 

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