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Labour: 45p tax rate cut would be ‘crass and unjust’


Shadow chancellor Chris Leslie has warned any reductions in taxes for the richest would represent “gross irresponsibility and unfairness”.

Speaking earlier today at KPMG, the Labour MP warned Chancellor George Osborne against slashing the top rate of tax from 45p to 40p ahead of the 8 July Budget.

He said: “George Osborne has form when it comes to giving a little with one hand, but taking much more with the other.

“Whatever the Chancellor announces on the personal allowance threshold, it will not be able to compensate for those losses felt by the many families in work who receive tax credits, 60 per cent of whom already pay no tax on their income.

“And it would be an act of gross irresponsibility and unfairness if the Chancellor took money from these working households while cutting taxes for the very richest for a second time.

“To countenance a cut in the 45p top rate on earnings of over £150,000 at this difficult time would be crass and deeply unjust. All help available must be for those on middle and lower incomes first.”

Leslie also set out three challenges for the Chancellor to meet in his Budget next week.

Firstly, he called for a guarantee that any tax cuts are focused on middle and lower income earners.

Secondly, the shadow chancellor demanded “a thoughtful and balanced approach” to public services reform.

And finally Leslie said the Chancellor must produce action to help spur economic productivity immediately.



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Lets assume that they do reduce it to 40%.

    Someone earning £30,000 a year would pay £3,880 in tax an effective rate of 13%. Assuming no tax credits available.

    Someone earning £200,000 a year would pay £73,643 in tax and effective rate of 36%.

    In £s despite earning 7 times more the person earning £200,000 would pay 18 times more tax.

    Not sure if that is a fair society or not?

  2. Good point Sean. If we factor in NI as well however, the £30,000 earner will pay 21.7% of their income in tax/NI, and the £200,000 earner will pay 40.5%. The % differential is not quite so pronounced in this scenario.

  3. Well when they are cutting people who get £45 from a state a week. i think someone who earns £200,000 has more capacity to deal with the hard times than people on benefits are. In your example they would still get around £130,000 a year!!!

  4. Exactly. I also think most of them will feel that they can shoulder this small amount of additional tax and indeed would be uncomfortable if the rate was reduced.

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