Scrapping 50p Tax Rate Unlikely, Says Danny Alexander

50p Tax Alexander

First Posted: 31/07/11 11:11 BST Updated: 29/09/11 11:12 BST

Danny Alexander has admitted the UK's economic recovery has been "choppier" than expected but said it was important to stick to the Government's plan for deficit reduction.

After official figures showed the UK's GDP grew just 0.2% in the second quarter of 2011, the Chief Secretary to the Treasury defended the Coalition's economic policy. He told the BBC on Sunday the road to economic recovery would be "long and difficult".

"We always said that recovering from the deepest recession that we've had for many decades, with the largest budget deficit that we've seen for a very long time was going to be choppy and I think probably the waters have been choppier than anyone expected. We've seen big headwinds in the global economy, rising oil prices, rising commodity prices. All those things have an impact on the British economy."

He blamed problems in the "global economy" for slow growth in the UK but admitted it was a concern: "Of course we're concerned about the situation in the economy. That's what we spend every day, every hour of every day working on."

The Liberal Democrat minister also said senior Conservatives calling for a change in the 50p tax rate were living in "cloud cuckoo land". Both Boris Johnson and former Chancellor Lord Lamont have called for the top rate to be abolished in recent days.

Alexander told the BBC: "We set out in the Coalition agreement, and it's something that we as Liberal Democrats pushed very hard for, that the Government's first priority in tax reductions would be tax cuts for people on low and middle incomes. Those very families who are working hard to try and make ends meet. Anyone who thinks we're going to shift our priority to reducing the tax burden for the wealthiest has got another thing coming."

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Danny Alexander has admitted the UK's economic recovery has been "choppier" than expected but said it was important to stick to the Government's plan for deficit reduction. After official figures s...
Danny Alexander has admitted the UK's economic recovery has been "choppier" than expected but said it was important to stick to the Government's plan for deficit reduction. After official figures s...
 
 
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HUFFPOST SUPER USER
Derek Lantin
Writer.
06:30 PM on 08/01/2011
Sir

I understand that the 50% tax produces very little revenue to the Exchequer.

I also understand that the 50% tax rate is a serious deterrent to foreign investors who might wish to do business in this country.

Logic, therefore, say s that the tax should be scrapped.

Sincerely, Derek Lantin. http://dereklantin.booksabuzz.com
09:39 PM on 08/02/2011
There's an issue of fairness - overwhelmingly the coalition's tax and spending policies have disproportionately impacted the poor and middle class, and removing a tax that only impacts the top 1% of taxpayers will, quite rightly, produce some degree of public outcry. If it was replaced with an alternative tax on wealthier individuals, or propose a greater stance on tax avoidance and tax evasion (unlike the soft approach the coalition is currently taking), then maybe, but the idea of a different tax rate for the richest citizens is something I support.
HUFFPOST SUPER USER
sasaki
04:10 PM on 08/01/2011
Could you interview Naomi Klein, author of SHOCK DOCTRINE. She contends that Milton Friedman, University of Chicago economics professor, believed that a crisis, real or artificial, is the moment to implement radical changes. Our current "debt crisis" is an example of using it to cut taxes for the wealthy, cut social spending and privatize government services.

Oddly enough Pres. Obama taught at UC from 1992-2004.
08:33 PM on 07/31/2011
I'm not giving you my money you little oiks! I need a second car for my third house!
06:12 PM on 07/31/2011
I read quite an interesting article in, I think it was the Financial Times. It was about "trickle-down economics"; the theory that tax cuts aimed primarily at the wealthiest would somehow trickle-down and provide substantial economic benefits for all, as well as lead to an increase to revenue. In practice, however, tax cuts as a form of economic stimulant, especially those that benefit the richest in society (and let us not forget that already the average FTSE 100 executive earns around 160 times more than their average employee; the rich-poor gap does not need to be any bigger) lead to increased deficits and 9 times out of 10 are not cost-effective as an economic stimulant.

Now, the article was about that economic theory, long a talking point of the American right-wing, establishing roots in Britain. Trickle-down economics, also known as voodoo economics, didn't work that well under Bush over in America; I wonder why Lamont and Johnson think it'll work here.
11:33 AM on 07/31/2011
Given problems with Inland Revenue, perhaps now is time to abolish National Insurance, adjust Income Tax and other taxes to maintain revenue levels, assign folk working in National Insurance to Inland Revenue and adjust entry level into taxation to exclude more low earners and small businesses.