Cut to top tax rate ‘necessary’

GEORGE Osborne has brushed off criticism of his decision to cut the top rate of tax, saying he was not prepared to keep the 50p rate “to make MPs feel good”.

Giving evidence to the Commons Treasury committee, the Chancellor said it was necessary to cut the rate to 45p to make the tax system competitive. He said his priority had been to close loopholes which enabled some of the wealthiest people in the country to reduce their income tax rate to zero.

“Should Britain continue with a tax rate which had been identified around the world as a deterrent to investment in Britain?” he asked.