Londoners split over top rate of tax ahead of budget

George Osborne Close Up

A new poll by YouGov suggests that Londoners are divided over the top rate of tax.

On Wednesday George Osborne will deliver the first all-Conservative budget since the days when John Major was in power.

The budget will be an interesting one as it will be to show what an all Conservative budget can do. Without the Liberal Democrats there is little stopping the Conservatives from attempting to implement their manifesto pledges.

One of the issues that will not be affected by the budget however, is the top rate of tax. According to the Telegraph, Mr Osborne has said he will not be cutting the rate for those paying over £150,000 from 45p to 40p.

However, a new poll by YouGov for the London Evening Standard indicates some demand for this, but also demand for the status quo and some demand for the reinstatement of the 50p tax rate that was introduced under Labour.

Overall, Londoners appear to be divided, but the least demand is for lowering the tax rate:

  • 21% want the rate cut to 40p
  • 30% want the top rate to remain at 45p
  • 36% want the rate to be put up to 50p
  • 14% say they do not know

London voters appear relatively split but one big conclusion cannot be made: the most popular option is putting the top rate back up to 50% but a majority of London voters would rather have it at 45p or 40p than at that rate from the Gordon Brown days.

Interestingly, most Conservative voters want the rate to stay at 45p. 41% want this, whilst 50% of Labour voters want the rate increased to 50p, unsurprisingly.

Analysis

By refusing to lower the top rate to 40p Osborne appears to have made a well thought out and calculated political decision. There are deep cuts to come: £12bn from welfare alone. With cuts to come the government can avoid being attacked for lowering top rate and appearing to be ‘the party of the rich’. Critics will say the rate should be higher but Conservatives will point to the fact that they did not raise it in the first all-Conservative budget in almost twenty years.

If the economy does better than expected Osborne will then have a reason to lower the top rate at a sensible time.

And with this poll showing that most Conservative voters (in London) favouring the 45p rate then it is arguable that this is a well-thought out decision.

View the full results of the YouGov/Evening Standard poll here. 1,047 London adults (18+) were interviewed between the 30th June and 2nd July.

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