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  1. Wealth
January 9, 2012

Tel: Cameron won’t scrap 50p income tax rate

By Spear's

The Prime Minister is to abandon plans to scrap the 50p rate of income tax amid increasing pressure from business leaders and backbench Tories, The Daily Telegraph can disclose

The Prime Minister is to abandon plans to scrap the 50p rate of income tax amid increasing pressure from business leaders and backbench Tories, The Daily Telegraph can disclose.

The Prime Minister and George Osborne are understood to have concluded that abolishing the levy is politically impossible in the near future amid fears that they will be accused of pandering to the wealthy.
Her Majesty’s Revenue and Customs is preparing a report for the Chancellor on the proceeds raised from the 50p rate, introduced by Gordon Brown in 2010.

Mr Cameron has come under increasing pressure from business leaders and backbench Tories to scrap the tax to stimulate the economy. He has said it should only be temporary and he is sceptical that it raises money.

However, the HMRC report is expected to show a “surge” in revenues totalling hundreds of millions of pounds from the first year — undermining the economic case for scrapping the levy. Ministers are also thought to believe that the decision effectively to extend the public sector pay freeze until 2015 has postponed the removal of the 50p rate.

A senior Government source said last night: “This is not now something we are moving on any time soon.” Another source said: “We are repeatedly emphasising the need for those with the broadest shoulders to do more.”

To read the full story, visit telegraph.co.uk

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