Osborne refuses to rule out tax cuts for wealthy

Mr Osborne said his party had no plans for a further reduction in tax for Britains wealthiest. Picture: Getty

The Chancellor said the party’s “big tax commitments” for the next parliament were further raising the tax-free personal allowance and raising thresholds so only those earning £50,000 or more would pay a higher 40p rate.

Labour has pledged to restore the 50p rate on £150,000-plus salaries, claiming those earning seven-figure sums have benefited by at least £85,000 over the two years since it was cut to 45p, and warning that Mr Osborne could push it lower still.

A further reduction to 40p would mean £1 million earners having another £340,000 shaved off their bill over the course of a parliament, shadow chancellor Ed Balls said.

Mr Balls said: “They need to tell us is that their plan – they won’t rule it out, they should do so now.”

However, Mr Osborne, when pressed repeatedly to say whether another cut was likely, would only say his party had “no plans” for a further reduction in tax for Britain’s wealthiest.

Prime Minister David Cameron also did not rule out a further reduction in the top rate of tax.

He said: “It’s not our policy, it’s not our plan.”

Labour’s shadow chief secretary to the Treasury, Chris Leslie, said Mr Osborne had been “flushed out”, pointing out he had used the same words about VAT before the last election, which he then raised from 17.5 per cent to 20 per cent.

Mr Leslie said: “Their priority is always about helping the very richest in society.”

The Chancellor, pressed on whether top earners could be in line for another tax cut, said: “That’s not our plan.”

Mr Osborne added: “You can judge us by what we say we want to do.

“And what we want to do is increase the tax-free personal allowance to £12,500 so people full-time on the minimum wage don’t have to pay income tax and millions are better off.

“And when it comes to higher-rate taxpayers, our priority is increasing the threshold at which you pay that higher rate, the 40p rate, to £50,000.

“Those are our big tax commitments for the coming  parliament.”

The two main parties have clashed repeatedly over tax plans, with the Tories ruling out a rise in VAT and Labour in National Insurance contributions under pressure from each other in recent weeks.

On the top tax rate, Mr Leslie said: “The Conservative Party’s secret plan has now been  exposed.

“Asked four times, George Osborne repeatedly refused to rule out another top-rate tax cut for millionaires.

“The Tories have raised taxes for millions but cut them for millionaires. And it’s now clear that if they win the election they’ll do the same again.

“While Labour’s better and fairer plan will back tax cuts for working people, these same old Tories always stand up for the few.”

Meanwhile, Liberal Democrat education minister David Laws accused the Conservatives of “unbelievable cheek” in taking credit for personal tax allowance rises.

Mr Laws, a former chief secretary to the Treasury, said the Prime Minister and Chancellor had failed to push for the move in talks with Lib Dems.

His party will spell out plans to “go further and faster” in increasing the allowance in the coming days, he said.

Mr Osborne said raising the level was one of his “big tax commitments”.

Mr Laws said: “The first thing I can say is that if the Liberal Democrats are in coalition talks after the next election then this will be one of the items that we want to put on the list for discussion before even the first cup of coffee has been served in the coalition talks. This is a massive priority for us.”

Mr Laws criticised the “unbelievable cheek” of the Conservatives as he noted there “hasn’t been a single Budget or Autumn Statement” in the last parliament where Prime Minister David Cameron or Mr Osborne made personal tax allowance rises a “Conservative ask”.

He added: “You can rest assured that what Liberal Democrats want to see is something more ambitious and bolder than the measures set out in the recent Budget, which was a coalition agreement between the two parties – Conservative and Lib Dem.”