Cameron and Osborne refuse to rule out cut in top rate of income tax

David Cameron Meets

David Cameron and George Osborne have both refused to rule out a cut in the top rate of income tax from 45p to 40p under a new Conservative government after the general election.

The prime minister and chancellor were interviewed separately by Sky News on Sunday.

Cameron, speaking in his constituency of Witney in Oxfordshire, where he was pictured cuddling a lamb, said cutting the top rate of tax was not “our policy, it’s not our plan”, but declined to rule it out.

“Our plan is to raise to £12,500 the basic rate threshold so we take another million people out of income tax altogether and cut tax for 30 million people,” he said.

“We’re also going to raise the 40p threshold to £50,000 because too many middle-income families are being pulled into that tax rate.”

Earlier on Sunday Osborne also repeatedly said a top rate tax cut “is not our plan”.

“You can judge us by what we say we want to do … 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 of people are better off,” he said.

Osborne stressed his priority for higher rate taxpayers was to raise the income tax threshold to £50,000. “Those are our big priorities for the parliament,” he said in an interview on the Murnaghan on Sky News show.

Chris Leslie, the shadow Treasury chief secretary, seized on Osborne’s wording to claim the chancellor had repeated a formula of having no plans to cut income tax – the same formula he has used in the past before pressing ahead with a VAT rise.

Also speaking on the Murnaghan show, Leslie said: “I think what you have managed to do here is to flush out the chancellor. Their priority is the rich.” Labour has said it will put the 45p rate back up to 50p for those earning more than £150,000.

It was not immediately clear if Osborne was trying to hide backstop plans to cut the top rate of tax, or merely trying to keep his options open. He has firmly ruled out increases in the basic rate of income tax, national insurance and, after some hesitation, VAT.

Osborne also condemned any post-election deal between Labour and the SNP as an unholy alliance “between the people who can bankrupt the country and those that want to break up the country”.

He said the TV debates meant people could see who would be the weak leader, Ed Miliband, and the strong leader, Nicola Sturgeon, with the former party leader Alex Salmond at Westminster.

“So we would have higher debt, higher taxes and weaker defences because the SNP would be propping up the government. We know who would be running that government and that would be bad for the integrity of the union,” Osborne said.

He also said there was no case for holding a second referendum in Scotland, pointing out that Salmond himself has said the issue had been settled for a generation, and other SNP leaders agreed.

Osborne again said there was no prospect of the Conservatives negotiating with the SNP on the future of the Trident nuclear deterrent.

Leslie said a coalition between Labour and the SNP was not an option and questioned whether Sturgeon was truly committed to bringing the Conservatives down. He was referring to the leaked civil service memo alleging that in private discussions with the French ambassador, Sturgeon had said Miliband was “not prime minister material” and that she would prefer Cameron to stay on at No 10.

Writing in the Observer, Sturgeon said the memo leak story was “100% untrue” and urged Labour to join an anti-austerity alliance with the SNP. But Labour has questioned the validity of her claim that she is proposing a radically different economic policy to its own plans.

Osborne also ruled out standing for the leadership of the Conservative party, saying David Cameron had promised to be leader for the next five years if re-elected.He said he wanted to have a TV debate with Ed Balls, the shadow chancellor, and Danny Alexander, the Liberal Democrat Treasury spokesman.

“The BBC is happy to run that format, we have got a date, we have got a time … I do not know why Ed Balls is running scared from that debate. He will have to answer that question,” he said.

Balls is keen to have a head-to-head debate with Osborne rather than face two coalition economics spokesmen who largely agree with one another on the handling of the economy between 2010 and 2015.

Earlier in the Murnaghan interview, Osborne said he was looking at allowing housing association property to be sold in a repeat of the housing revolution introduced by Margaret Thatcher in the 1980s.

Monday sees the introduction of Osborne’s pension reforms, which give people greater freedom to decide how they spend the money they have saved for their retirement.

The chancellor urged people to take the initially free, neutral government advice, as well as talking to Citizens Advice to help make sure they make the right choices about their savings.

“This is a complete revolution and it starts at midnight,” he said. “Tomorrow [Monday] is … pensions freedom day and this is a revolution that is going to improve retirement for millions of people.

“It is an act of deliberate economic policy that says to people who have worked hard and saved hard ‘we trust you with your savings’. They are part of an economic plan that is moving people away from debt toward savings and growth.”

Powered by article was written by Patrick Wintour Political editor and Rowena Mason, for on Sunday 5th April 2015 14.09 Europe/ © Guardian News and Media Limited 2010