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Labour accuses Tories over tax rate

Published 05/04/2015

George Osborne visiting a Help to Buy housing development in London
George Osborne visiting a Help to Buy housing development in London

David Cameron and George Osborne have been accused by Labour of favouring the richest in society after failing to rule out cutting to the top rate of income tax to 40p in the next parliament.

The Prime Minister and Chancellor insisted it was "not our plan" if the Conservatives retain power at General Election - with their "priority" being to raise the tax-free personal allowance and take those earning under £50,000 out of the higher rate band.

Shadow chancellor Ed Balls said they were clearly opening the door to another boost to top-earners, pointing to a hike in VAT in 2010 following pre-election declarations to have "no plans" for one.

And the Tories also came under fire from Liberal Democrats who promised to go "further and faster" on raising allowances and accused their former coalition partners of "unbelievable cheek" for trying to take credit for the policy.

Tax rows dominated an Easter Sunday free of much concerted campaigning, with party leaders mostly restricting their activities to video and social media messages marking the religious occasion despite the two main parties remaining deadlocked in weekend polls.

Mr Cameron joined churchgoers and posed for pictures with a newborn lamb on a farm in his Oxfordshire constituency after urging Britons in a YouTube clip to "feel proud to say this is a Christian country".

Pressed on income tax plans during the farm visit, he said: "It is not our policy, it is not our plan. Our plan is to raise to £12,500 the basic rate threshold so that we take another million people out of income tax altogether and cut tax for 30 million people. That is the plan.

"We are also going to raise the 40p threshold to £50,000 because too many middle-income families have been pulled into that tax rate.

"Those are our plans and they are the ones we will pursue"

The Chancellor told Sky News: "If that was our priority or our plan we would have made it part of our plan and made it one of our priorities."

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 warns 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 - urging Mr Osborne to "come clean" over his plans.

Shadow chief secretary Chris Leslie said : "The Conservative Party's secret plan has now been exposed.

"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."

The Liberal Democrats - who claim they had to push the Tories into accepting rises in allowances at a succession of coalition budgets - are expected to unveil more radical proposals this week.

With the latest rise due to come into effect tomorrow, Education Minister David Laws said the policy will be high on the agenda "before even the first cup of coffee has been served" should the Lib Dems be part of coalition talks after May 7.

"The Liberal Democrats... would want to go far faster than the existing trajectory for increasing the personal tax allowance," he told BBC Radio 5 Live.

SNP leader Nicola Sturgeon sought to fight off claims in a hotly-disputed leaked diplomatic memo that she would prefer a Tory win on May 7 with a fresh offer to Labour to work together to "lock out" David Cameron from No.10.

A Whitehall leak inquiry is under way following the publication by the Daily Telegraph of a confidential Scotland Office note about Ms Sturgeon's recent meeting with the French Ambassador.

Mr Cameron said Scottish nationalists providing Westminster support for a minority Labour administration was "a very worrying prospect because it would cost jobs, it would knock our economy sideways, it would hurt working families".

On a visit to a garden centre, Mr Osborne accused Labour of planning to "destroy" his scheme to help first-time buyers with a special tax-free savings account by seeking to ensure the investments were used to build new homes.

A Conservative government would aim to double the number of first-time buyers by 2020 - meaning half a million a year getting their feet on the housing ladder, he said.

Labour claims Britain's chronic housing shortage is being fuelled by coalition schemes such as Help to Buy, but no action is being taken to boost supply.

It plans to use the new Isa scheme announced by Mr Osborne in the Budget to push £5 billion of finance into house building.

A poll suggesting half of voters agree with Ukip's call for a ban on immediate free NHS treatment for immigrants was seized on by the party as vindication of controversial comments by Nigel Farage.

Mr Farage insisted yesterday he had "overwhelming support" from the general public after coming under for criticising NHS treatment of foreigners with HIV during last Thursday's televised debate.

The YouGov poll found 50% backed a five-year ban on new arrivals getting free NHS care and 52% said Mr Farage was right to raise the issue of "immigrants with serious conditions like HIV costing the health service a large amount of money".

Only 37% agreed that he was "scaremongering".

A Ukip spokesman said: "Nigel Farage is the one leader who has the political courage to raise difficult issues and clearly millions of voters agree with that stance."

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