• The Chancellor will cut higher rate income tax from 50p to 45p next year
  • He told a summit of CEOs that a cut to 40p was difficult if they didn't stand up for the Coalition
  • The 'politics of envy' and 'anti-business sentiment' could win, he said

By Martin Robinson


War of words: The Chancellor George Osborne last night told big business to back him or face not getting tax cuts

War of words: The Chancellor George Osborne last night told big business to back him or face not getting tax cuts

George Osborne has told big business to back the Government or he will not cut the top rate of income tax for Britain's biggest earners to 40p.

The Chancellor warned that he and the Coalition 'are putting their necks on the line' to help them prosper but not enough are speaking out to support them.

In a speech to businesses leaders yesterday he slammed their 'near silence' when at the last Budget in March he agreed to cut the top rate of tax from 50p to 45p, to the anger of many Britons.

And he added that the 'politics of envy' and 'anti-business sentiment' could end any idea to cut the rate back to 40p - if they fail to back him.

'If your voice is not heard then elected politicians are going to find it very difficult to put together pro-business packages because you leave the space open for everyone else,' he told The Times CEO summit.

‘If you are not out there, engaged, in those arguments, then you are going to leave the field open to those people who want to fill that space, and who argue that companies have got to pay more tax.

'At the moment we are having a pretty big argument about the size of the State and who should be taxed and what are the right levels of taxation are. If we don't get much voice from  the business community then that is more difficult,' he said.

Business leaders had to do more to counter the hostile public mood, he said. ‘You just see, otherwise, the politics of envy coming in and the politics that says it’s perfectly acceptable for the state to take half of all national income.’

Temporary: The Treasury has admitted the 45p rate will not be permanent, allowing for a further cut

Temporary: The Treasury has admitted the 45p rate will not be permanent, allowing for a further cut

The top rate of income tax will be cut from 50p in the pound to 45p next year for those earning over 150,000.

The 50 per cent level was introduced by Gordon Brown in April 2010.

George Osborne risked a political backlash by announcing that he would scrap the highest tax rate because he said it would raise five times as much in other tax raids targeted at the richest.

Critics said he and the Government had bowed down the the bankers and their giant salaries and bonuses.

The Treasury also said the change was 'temporary', leaving the Chancellor with the chance to cut it back to the 40p rate later. 

In the same speech yesterday Mr Osborne accepted the March Budget, which caused him to do several sharp U-turns since, had led to 'lots of bad headlines' but added he was doing his bit to make Britain's economy more competitive.

He added that in the 1980s Margaret Thatcher had won the argument that high-earners should pay less tax, because big business had backed her.

In the same speech he said Angela Merkel may be willing to sacrifice Greece in order to persuade German voters to bail out the euro.

The Chancellor suggested Germany may ‘require’ the crisis that would follow a Greek exit to convince its voters to take the unpalatable steps needed to rescue the single currency.

‘I ultimately don’t know whether Greece needs to leave the euro in order for the eurozone to do the things necessary to make their currency survive.

‘I just don’t know whether the German government requires Greek exit to explain to their public why they need to do certain things like a banking union, eurobonds and things in common with that.’

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

I'd like to ask George Osbourne if he has ever run his own business - because the levels of taxation he is inflicting on anyone trying to run a business UK is preventing me from doing business? I can't lower my daily rate and also cover my business running costs - so I guess that I'm going to have to move my business abroad - perhaps to one of those low tax economies where this country continues to send huge sums in "aid"?

Funny how their not listening to the majority of people in this country - perhaps they need to be reminded one person one vote!!!! Unless that systems a con as well?

another measage to the ritch dont back me and i wont cut it back ti 40% thats what he means

The rich can afford to hire accountants to minimise their tax bills, so they don't actually pay anywhere near the current 50%. Some of them end up paying 10% or less. Proportionately speaking, the poor pay more tax than the rich.

Thought blackmail was a crime in this country!!!!!

Despite saying consistently since the election in 2010 , " This is clearly NOT the right time to be reducing the 50p top tax rate " the government under Cameron choose the middle of a self created, double-dip recession as 'the right time' And this government thinks it's more competent than the last ! ,..................... you've got to be kidding me !

Has this man no shame? - Robin, London, 13/6/2012 11:44----------------No, none whatsoever.

I suppose having tried everything else and failing dismally, blackmail is the next logical step

When somone reports Mr. Osborne referring to Big Business; isn't this just politicalese for financial institutions?

I fully back a reduction in tax rates and a cut to the welfare bill to fund it. Anyone that doesn't support a tax cut doesn't have a clue about economics and how to spur growth.

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