Osborne denies plan to cut top rate of income tax

Cutting the top rate of income tax is not “one of our priorities”, George Osborne said as he repeatedly ducked Labour calls for him to rule out further help for top earners if the Tories win the general election.

The chancellor said the party’s “big tax commitments” for the next parliament were further raising the tax-free personal allowance and raising thresholds so the higher 40% tax rate would apply to salaries of £50,000 (€68,000) or more.

Labour has pledged to restore the 50% rate on £150,000-plus salaries, claiming those earning seven-figure sums have benefited by at least £85,000 over the two years since it was cut to 45% and warn Mr Osborne could push it lower still.

A further reduction to 40% would mean £1m earners having another £340,000 shaved off their bill over the course of a parliament, shadow chancellor Ed Balls said, urging Mr Osborne to “come clean” over his plans.

But pressed repeatedly to say whether another cut was on the cards, the chancellor said: “If that was our priority or our plan we would have made it part of our plan and made it one of our priorities.

“That’s not our plan. Judge us by what we want to do and what we want to do is increase the tax-free personal allowance to £12,500 so people full-time on the minimum wage don’t have to pay income tax and millions are better off.

The two main parties have clashed repeatedly over tax plans – with the Tories ruling out a rise in VAT and Labour ruling out a rise in national insurance contributions, under pressure from each other in recent weeks.

Shadow chief secretary Chris Leslie said Mr Osborne had been “flushed out”, adding: “Their priority is always about helping the very richest in society.”

The chancellor also declined to commit to continuing to meet a target for Nato members to spend at least 2% of GDP on defence.

Senior Tories and military figures have demanded the threshold — agreed at a UK-hosted summit in Cardiff last year — be met despite further deep cuts planned in public spending for the next five years in unprotected government departments.

“We made a commitment at Nato. We are spending it today... we have made commitments on the size of the armed forces,” he said.

“I don’t think anyone should be in any doubt ... about our commitment to strong national security,”Mr Osborne said.

As Scottish National Party leader Nicola Sturgeon sought to fight off claims in a hotly-disputed leaked diplomatic memo that she would prefer a Tory win on May 7 with a fresh offer to Labour to work together to “lock out” David Cameron from No 10, Mr Osborne said such a deal would harm the UK.

“The fact that the Labour Party, that was a party that campaigned for the Union in the referendum, is contemplating an arrangement with the SNP, who want to break up the country, is deeply disturbing,” he said.

“People know that Ed Miliband is weak, that the Scottish nationalist leaders are much stronger than he is and we know who would be running that government.

“That would be bad for the entire United Kingdom, bad for the integrity of the Union but also bad for our economy.”

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