Osborne: increase in people paying 40p tax good for Conservatives

George Osborne

The Chancellor faces ridicule after he tells Tories there are ‘advantages’ to more people paying the higher rate of tax

LAST UPDATED AT 09:09 ON Sun 16 Mar 2014

CHANCELLOR George Osborne told a meeting of fellow Conservatives that forcing more people to pay the higher rate of tax is good because it makes them want to cut government spending.

Osborne made the comments last month at a meeting with senior Conservatives of the 1922 Committee, a powerful group that speaks for Tory backbenchers.

“Let’s not forget there are advantages in more people paying tax at 40p,” the Chancellor said. “It means they feel they are a success and joining the aspirational classes. That means they are more likely to think like Conservatives and vote Conservative.

“If they are paying 40p tax they have a greater interest in cutting Government spending because they are paying for it. All the polling evidence suggests I am right.”

Osborne’s comments are reported today in the Mail on Sunday. An MP who was at the meeting told the paper: “There was a stunned silence. I never thought I’d hear a Tory Chancellor say paying more tax is good for the middle classes. It was a Marie Antoinette moment.”

Another MP said: “The 40p rate may not affect the millionaire son of a baronet like Mr Osborne but it is killing hard-working people who earn around £40,000. It was an insult and shows how out of touch this Government has become.”

Osborne will unveil his Budget on the 19 March. He is reportedly considering increasing the sum that workers can earn before paying income tax to £10,500 while leaving the higher rate at 40p despite calls from fellow Conservatives to increase it to appease middle class voters.

One Conservative MP at the 1922 meeting told Osborne he was being “illogical”, adding: “You cannot argue that making more people pay 40p tax is good because they are more likely to want to cut government spending, while letting more people at the bottom end pay no tax whatsoever.” · 

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