View more on these topics

Clegg rules out another top rate income tax cut before 2015

Nick Clegg Bournemouth Rally 480

Deputy prime minister Nick Clegg says there is “no question” of cutting the top rate of income tax below 45p in this parliament.

In his speech to the Liberal Democrat autumn conference in Brighton today, Clegg said he “conceded” the cut from 50p in the March Budget so he could “insist” upon the raising of the personal allowance to bring more low-earners out of paying tax.

Chancellor George Osborne announced that the cut will take place in April 2013, highlighting a HMRC report showing the increase in the rate from 40p to 50p had only raised one-third of the £3bn forecast.

Clegg said: “Now that we have brought the top rate of tax down to 45p – a level, let’s not forget, that is still higher than throughout Labour’s 13 years in office – there can be no question of reducing it further in this parliament. All future cuts in personal taxation must pass one clear test: do they help people on low and middle incomes get by and get on? It is as simple as that.”

The Lib Dem leader pledged to stick to the Government’s austerity programme and rejected calls from the right to de-regulate and calls from the left to spend more as ways of boosting the economy.

He said: “What is needed – and what we are delivering – is a plan that is tough enough to keep the bond markets off our backs, yet flexible enough to support demand. A plan that allowed us, when the forecast worsened last year, to reject calls for further spending cuts or tax rises and balance the budget over a longer timescale.”

He said because the plan commands the confidence of the markets, it has allowed the Government to launch the Funding for Lending scheme.

Clegg warned that Britain could turn into the economic equivalent of Greece if it does not pay down its debts and deficit.

He said: “In the coming years, some countries will get their own house in order. But some will not. Those that do will continue to write their own budgets, set their own priorities and shape their own futures.

“But those that do not will find their right to self-determination withdrawn by the markets and new rules imposed by their creditors, without warning or clemency.

“That that will never happen to us is often just blithely assumed; the comparisons with Greece, breezily dismissed. Yet it is the decisions we take – as a Government, as a party – that will determine whether we succeed or fail.”


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Is it not fair to say that for those of us who pay higher rate tax, and if truth be know do all we can to reduce our tax bill. The money saved is spent on meals out, holidays, clothes, cars etc. etc. Is this not helping boost the economy?

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm