Osborne backs tax 'transparency'

A US-style system of top politicians' tax returns being published could be considered in the UK, George Osborne indicated as the issue of personal finances continued to dominate the London mayoral race.

The Chancellor told The Telegraph he was "very happy" for the Government to look at the move, and Business Secretary Vince Cable declared that he was prepared to be open about his personal finances.

Pressure for ministers to reveal their income intensified on Thursday when the main rivals for the capital's top job set out details of their own earnings and tax.

The openness was prompted by a bitter public row between Boris Johnson and Ken Livingstone over tit-for-tat accusations of avoiding income tax by channelling earnings through companies.

In an intervention that is sure to open a serious debate, Mr Osborne told the newspaper: "My personal principle has been: make the rules in general more transparent.

"We are happy to consider publishing tax returns for people seeking the highest offices. Of course, they do it in America."

Mr Osborne also made clear that he would be open about whether he personally benefits in future from the reduction in the top 50p rate of income tax which he controversially cut in last month's budget.

"No doubt, next time I fill in a tax return, I will be asked the question and will give you a straightforward answer," he said - saying he had not been in the top earner category last time.

Backing openness in tax affairs, Mr Cable told The Telegraph: "I'm quite happy to be open about it. I have no problem with my tax return being published while I am in government."

Mr Livingstone, who is fighting to wrest back for Labour the post he lost in 2008, has come under fire for channelling earnings through a company so that they are liable for corporation not income tax.

In a foul-mouthed bust-up, Tory incumbent Mr Johnson called his City Hall predecessor a "f****** liar" over on-air allegations that he operated a similar arrangement.

Challenged to do so by Mr Livingstone, Mr Johnson and Liberal Democrat hopeful Brian Paddick issued accountant-signed statements of their earnings and tax for the past three or four years.

But although he published some figures, the ex-mayor said he would only give full details of his earnings if others agreed to disclose information concerning spouses and partners.

Mr Osborne, who has faced a stinging backlash over the tax cut for top earners and other budget measures such as the so-called "granny tax" of reduce income tax allowances for pensioners, defended the package.

"We are not in a daily popularity contest. But Britain is in a daily contest around the world," he said.

"I think this Government is helping Britain to win that contest."

His latest defence of the measures came as an opinion poll showed voter confidence in his ability to run the UK economy had slumped to an all-time low.

As many as 60 per cent do not trust him with the nation's purse strings (up eight points on last month) while those expressing confidence is down from 25% to 21%.

That net score of -39, in a ComRes poll for ITV News, is much worse than his previous low of -30, in July last year.

Mr Osborne insisted he is "unrepentant" about the Budget and claimed the measures it included have been received well internationally.

He said: "I don't have any regrets about the substance of the Budget, I'm unrepentant about it [being] an aggressively pro-business Budget ... it cut the top rate of tax which was deeply uncompetitive, it lifted millions of low-paid people out of tax altogether, and it cut the corporation tax rate so that Britain is very, very competitive in the world."

He also hit back at suggestions the Conservatives are out of touch.

"That is, again, a usual charge from the usual suspects," he said.

"It's now been four years since we were all chased around by people in top hats so it's hardly a new charge. I don't think it's relevant now and I don't think it was relevant then."

He added: "I feel that as long as the Government is on the side of those working people, then it will be a Government that is in touch."

Ukip leader Nigel Farage said publishing tax returns would deter some talented potential political candidates from standing for office.

He said: "Everyone complains about the quality of our politicians. But it is our own fault. Why would somebody of flair and ability put themselves forward today?

"Osborne wants politicians to publish their tax returns in the cause of transparency. But that will never be enough. When will it end? The last 20 years of tax returns? School reports? Medical records?

"We are creating a situation where no one with any ability will put themselves forward for elected office. This suggestion will be yet another reason for people to look at the prospect of devoting their lives to public service and ask themselves is it worth it?

"We are tired of being run by a bunch of college kids who have no experience of the real world. These proposals will merely reinforce the problem."

PA