Emergency Budget 2015: Boris Johnson calls on George Osborne to cut top rate of income

Mayor of London says the move must be accompanied by firms paying workers the living wage

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Boris Johnson has added his voice to a growing chorus of Conservative politicians calling for the top rate of income tax to be cut to 40p in Wednesday's Emergency Budget.

But he said it must be accompanied by a significant wage boost for the lowest paid workers by leaning on companies to pay the living wage, a voluntary rate that is paid by more than 1,600 firms across the country.

The Mayor of London becomes the most senior figure in his party to call for the 45p rate of tax - paid by those earning more than £150,000 - to be cut in this week's Budget, joining former Tory Chancellors Lord Lawson and Lord Lamont as well as a host of backbench MPs who raised the pressure on Mr Osborne last week.

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George Osborne delivers his second Budget of the year on Wednesday 8 July

 

However Mr Osborne is expected to reject calls from his own party to cut the top rate of tax, having told the Andrew Marr Show that his "priority" for the Budget was delivering what was in the Conservative party manifesto at the election.

Memories of the bad press he received from his 'omnishambles' Budget in 2012, when he cut the top rate of income tax from 50p to 45p, will deter him from another controversial cut for the highest earners.

Mr Osborne is also wary of giving the richest a tax cut at the same time as he announces a cut in tax credits for the poorest workers.

Instead he is likely to focus tax cuts on reiterating the Conservative manifesto's pledges to raise the personal allowance to £12,500 and raise the 40p tax threshold to £50,000 by 2020.

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Writing in his weekly column for the Daily Telegraph, Mr Johnson wrote: “We should have the most competitive tax regime in Europe. But we need to make clear to the business leaders of this country that we can only cut tax for them at the top if they do the right thing: treat their workers properly and pay them a living wage."

He added: "As for low pay, it isn’t a function of market forces. It’s being propped up by the taxpayer. That needs to end. And that means business has got to start paying its people a wage they can live on.

"Yes, we should be cutting taxes all round – cutting the top rate as well as lifting the thresholds and taking the poor out of tax. We should have the most competitive tax regime in Europe. But we need to make clear to the business leaders of this country that we can only cut tax for them at the top if they do the right thing: treat their workers properly and pay them a living wage."

Mr Osborne repeatedly refused to rule out cutting the top rate of income tax before the election but speaking yesterday, he dropped a heavy hint that it would not be part of this week's Budget. He said: "We’ve set out our tax priorities. And, again, I know this is going to sound a bit like a stuck record, but we made some promises in the election and I want to deliver on the promises.

"And the promises we made in the election were on the thresholds. We want to take people on the minimum wage out of income tax, raise that tax free allowance to £12,500. For people earning a bit more, we want to raise the higher rate to £50,000. Those are our priorities."

 

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