THERE was confusion over the government’s policy on the 50p tax rate yesterday, after the Treasury appeared to contradict remarks made by Lord Mandelson.
When asked about the top rate of tax for workers earning over £150,000, Mandelson said: “I would favour, when financial circumstances permit, for the top rate to come down, just as it has gone up when times were hard.”
“If we had an ideological objection to the top rate being at 40 per cent, why did we keep it there for so long? It was only financial circumstances that forced us to take a different view. Just as we took a view in one set of circumstances, we can take a different view in another.”
But a Treasury spokesman yesterday insisted the government intended to keep the tax in force for the entire lifetime of the next parliament, which could last until 2015.
Referring to a Treasury dossier on Tory spending plans that said the 50p tax would stay in place for at least five years, the spokesman said: “That was the intention signalled in the document. That is still the intention.”
The Tories have not said whether they would scrap the 50 per cent rate if elected. “We don’t like the 50p tax, but it has to take its queue in the list of things we want to get rid of,” a spokesman said yesterday.
Meanwhile, shadow chancellor George Osborne indicated he will pay down the bulk of the UK’s £178bn budget deficit with spending cuts – not tax rises.