Labour is today challenging the Tories to rule out another giveaway for millionaires, as new figures show the scale of the tax cut David Cameron has given to the richest people in the country.
While families have lost £1100 a year on average because of tax and benefit changes made by the Conservative-led government, new figures show the highest earners are hundreds of thousands of pounds better off.
The new tax year on Monday marks two years since David Cameron and George Osborne cut the top rate of tax from 50p to 45p in 2013.
Figures compiled by Labour show that this tax cut has given someone with an income of £1 million a tax cut of £85,000 over the last two years.
Someone earning £5 million has received a tax cut of £485,000 while someone earning £10 million has gained £985,000 over the last two years.
The Tories have repeatedly refused to rule out cutting the top rate of tax again for people earning over £150,000. In 2012 David Cameron had originally wanted to cut the top rate to 40p, rather than 45p.
If David Cameron did so after the election, figures compiled by Labour show it would mean an even bigger tax giveaway for top earners. For someone earning £1 million it would mean a total gain of £340,000 over the course of the next Parliament from Tory cuts to the top rate of tax.
Meanwhile someone earning £5 million would get a total tax cut of £1.94 million and someone earning over £10 million would gain a total of £3.94 million by 2020.
Writing in tomorrow’s Sunday Mirror, Labour’s Shadow Chancellor Ed Balls says:
“The new tax year starts tomorrow and we can expect the Tories to be going round telling people they’ve never had it so good.
"How out of touch can they get? The truth is millions are worse off because of this government’s choices.
"As well as years when bills have gone up faster than wages, we’ve had a big rise in VAT and cuts to tax credits for working people too.
"Independent experts at the Institute for Fiscal Studies say families have lost £1100 a year on average from all the tax and benefit changes made by this government.
"George Osborne will boast he’s raised the personal tax allowance, but he won’t admit he’s taken much more away with his VAT rise and tax credit cuts.
"And while millions are paying more, millionaires are paying less.
"David Cameron and George Osborne have given the very highest earners a huge tax cut. The Tories ditched the idea that we are ‘all in this together’ and looked after their friends first.
"And if the Tories win the election, they’re set to give the top one per cent of earners another big tax cut – cutting the top rate of tax again from 45p to 40p.
"How can this be fair when working people are struggling, our NHS is in crisis and when we still need to get the deficit down?
"David Cameron and George Osborne must come clean this weekend. If they carry on refusing to rule out another tax cut for millionaires people will conclude that’s exactly what they’re planning.
"Labour has a better, fairer plan. We’ll reverse this £3 billion a year Tory tax cut for the very richest to help get the deficit down in a fairer way.
"We’ll cut taxes for millions of working people with a lower 10p starting rate of tax. And we’ll back families with 25 hours of free childcare, an £8 minimum wage and a ban on exploitative zero-hours contracts.
"Labour knows what when working people succeed Britain succeeds too. But while Labour backs working families, these same old Tories always stand up for the few.”
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