GEORGE Osborne should have gone further in cutting the top rate of tax by reducing it from 50p to 40p in his Budget last week, rather than 45p, according to our readers’ panel.
Sixty-seven per cent of panellists on the Voice of the City Panel, run in conjunction with PoliticsHome, said the chancellor should have cut the top rate of tax back to 40p, compared to 30 per cent who disagreed.
However, the vast majority of panellists (76 per cent) said they were favourable towards the decision to cut the rate of income tax on those earning over £150,000.
One panellist said: “Reducing the top rate to 45p has effectively made it permanent, which will be counterproductive in the longer term. The chancellor would have been better off retaining 50p but committing to reduce it to 40p over a specific period.”
The most popular measure was the reduction in the headline rate of corporation tax by two per cent to 24 per cent. Eighty-seven per cent said they were favourable to the policy.
A new seven per cent rate of stamp duty on the sale of houses worth more than £2m was also popular with the majority of panellists, with 53 per cent saying they were favourable, against 32 per cent who said they were unfavourable.
Osborne’s so-called “granny tax”, which will see the personal allowance for pensioners frozen, drew a more mixed response. Roughly 40 per cent said they were unfavourable to the policy while a similar amount said they were favourable.
However, some members of the panel said they thought Osborne had failed in the way he presented the policy, which drew sharp criticism in the media last week. “It is surprising that Osborne didn’t at least pre-brief the ‘granny tax’, so that it could be presented as overall package of fairness and rebalancing,” said one panellist.
The Budget led to a modest bounce in the chancellor’s approval ratings on our panel. Forty-three per cent of panellists said they were more favourable to Osborne following the Budget compared to 25 per cent who said they were less favourable. Around one third said it had made no difference.