UK Tories Rule Out Tax Hike For The Rich

by Robert Lee, Tax-News.com, London

22 August 2008

Shadow Chancellor George Osborne has said that a future Conservative government would not seek to raise the 40% top rate of income tax to reduce income inequity in the UK, but will instead focus on initiatives to allow the lower paid to keep more of their own money.

Following the launch of a new Tory report entitled 'An Unfair Britain' last Tuesday, Osborne told BBC Radio 4 that the way to achieve a fairer society was not by hammering the rich with higher taxes.

"I completely reject, for example, the proposal put forward by government ministers earlier this week to increase the top rate of tax," Osborne declared.

The Shadow Chancellor's comment came in response to a suggestion by Ivan Lewis, a Health Minister in the Labour government, that under-fire Prime Minister Gordon Brown should consider "morale boosting" tax increases on the country's wealthy.

Although the Health Minister did not specify the rate of increase that he thought would allow the government to provide "meaningful" assistance to middle class voters, it is thought that Lewis favours a proposal for an extra ten pence in the pound tax on earnings of more than GBP250,000.

Osborne argued however, that the Labour government's tax and welfare policies have in actual fact punished the least well off by imposing huge marginal rates of tax on income earned when benefits are withdrawn.

According to Osborne, the government's own figures show that when someone on GBP100 a week increases their income, for every pound of extra pay they take home just 6p.

"The recent renewal of calls from a Government Minister for a 50p top rate of tax on the grounds of 'fairness' would not in fact make our country fairer. When will the left learn that higher marginal tax rates are not the route to either prosperity or fairness?," Osborne asked in a recent speech to the centre-left think tank, Demos.

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