Clegg plays down Tories’ hopes of scrapping 50p tax band

Deputy Prime Minister Nick Clegg has dismissed Conservative hopes for an early abolition of the 50p top rate of income tax.

The Sheffield Hallam MP claimed it would be wrong to prioritise support to a “very small minority” when millions are facing economic difficulties.

The Liberal Democrat leader also stressed that the decision to aim help at those on low and middle incomes was taken “as a coalition” with the party’s Conservative allies.

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Chancellor George Osborne has described the 50p rate on top earners as “uncompetitive internationally” and asked officials to assess how much money it raises.

The comments, made on the BBC Radio 4 Today programme on Saturday, were seen as a signal that the rate, paid on earnings over £150,000, could be scrapped.

Yesterday Mr Clegg said: “The coalition agreement is clear that what takes precedence, if you have got money and the ability to provide tax relief to people, is tax cuts for millions of people on middle and low income. I think it is a huge achievement that even in these difficult times we have already taken 800,000 people on low pay out of paying any income tax whatsoever and given every single basic rate taxpayer some money back through the increase in the threshold.

“That will continue, so next April we will be up to over a million people on low pay out of income tax and more money back to every basic rate taxpayer. Why did we take that decision as a coalition last year? For a really obvious reason: when we are doing really difficult things in the economy, when living costs are high, when people are really feeling the strain, of course it is right to prioritise help, where you can give help, to the millions of people who need that help the most and not prioritise help to a very, very small minority of people who don’t need as much help – in other words, the people at the very top.

Earlier this month Business Secretary Vince Cable, also a Lib Dem, insisted that if the 50p rate did go, it would be replaced with another levy on the rich.