In today’s budget, the Chancellor unveiled what we were all expecting, and what many were demanding; a change to the top rate of income tax paid in Britain. This was a hugely distortionary tax, which, by various estimates raised either a marginal sum, or, as many studies suggested, lost the UK up to £500m in tax revenue each year due to its effects on tax avoidance and severe damage dealt to the UK economy by pushing businesses and top earners overseas, or worse, by discouraging aspiration to strive for higher earnings and productivity.
All things considered, there seem few arguments to support the introduction of such a tax in the first place; one of the highest tax rates in Europe, introduced in a time of poor economic performance when tax relief for those producing the most wealth in the economy could have shored up the recovery. But of course, to consider such an argument belies the fact that the introduction of this tax rate had nothing whatsoever to do with business, the economy, or indeed, the well-being of Britain. No, this was of course one of Labour’s crowning examples of sheer brazen self-interest and disregard for the people who elected them. A political time bomb set to embarrass the Conservatives, whatever the cost to the millions who foot the bill, directly or indirectly.
It is therefore no surprise to see them so well prepared to dust off their briefing notes on how to bash the Tories for reforming the tax. “A budget for millionaires” they cry. “Tax breaks for the rich” they moan. “An unfair budget from the same old Tories” they carp. Frankly, I’d imagine Miliband was feeling the pressure upon him, realising the time had finally come to deliver the pre-planned attack, most likely drafted by Mandelson himself before they even introduced the tax; it’d be like Cameron reading a dusty old reply scribbled down by Thatcher.
Labour clung to power in our country for 13 years, or to be more precise, 4,754 days, during which they managed to put even some of their more outrageous and disastrous plans into motion. Seems remarkable then, given taxing the wealthy seems so important to them now, that they let 4,713 days pass before introducing the 50p rate; just 6 weeks before they were kicked out of office. Like the notes left behind in the treasury office, the old food left in the Downing Street fridges, and the £1.3 trillion debt legacy on the public accounts, the 50p tax bracket was just another part of the rotten mess Labour left behind in Whitehall for us to clean up, and it’s about time. Good riddance.Owen Williams Vice President