Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, responding to the Institute for Fiscal Studies’ Observation on the 50p top rate of tax, said:

“The IFS has repeated its view that there is ‘substantial uncertainty’ around HMRC’s estimates two years ago. As the IFS says, this assessment was done ‘at great speed’ and with ‘partial data’ for just the first of the three years when the 50p rate was in place.

“We also know that the key assumptions made in this calculation about behavioural effects were decided by Ministers, not HMRC. And the costings produced by George Osborne were based on old data. We now know that tax revenues from people earning over £150,000 were nearly £10bn higher over the three years that the 50p rate was in force than expected at the time.

“Cutting the top rate of tax has resulted in giving the richest one per cent of earners a tax cut of over £3 billion a year, but Ministers took a gamble that they would recoup that in less tax avoidance. At a time when the deficit is high and taxes have gone up for ordinary families it cannot make sense to give the very richest people in the country such a huge tax cut.

“While the Tories plot another cut in the top rate to 40p, we are clear that Labour will get the deficit down in a fairer way. Asking those with the broadest shoulders to bear a greater share of the burden is a very important part of that.”

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