John Denham is the Labour MP for Southampton Itchen. He has written to all of the MPs in Hampshire to warn them that a tax break for the richest is the wrong priority at the wrong time. 300,000 people earning above £150,000 are set to gain on average £10,000 from the change in the top rate of tax.
Labour MPs will be voting against the cut to 50p tax rate today.
Figures published by the Government have now revealed that over 14,000 millionaires who currently pay tax at 50% on their earnings over £150,000 will now get a tax cut of at least £40,000 each.
– The Institute for Fiscal Studies has cast doubt over the findings of the review of the 50p rate, saying it is uncertain that the cost of cutting the 50p rate is as low as Ministers claim.
– HMRC’s review of the 50p top rate confirms that the government is cutting taxes for the richest earners next year by £3 billion.
Writing to fellow Hampshire MPs, John Denham said:
“George Osborne has taken a potentially hugely expensive gamble. By giving a £3 billion tax cut to the very richest – an average tax cut of £10,000 to every top rate taxpayer – he is betting that he will somehow get £2.9 billion back in extra tax revenues from people currently not paying the top rate of tax. But both the OBR and the IFS have cast doubt over this possibility.
“Many of Hampshire’s families will lose out on £253 as a result of this budget. Pensioners are set to lose £75 a year from April 2013. With rising fuel prices, cuts to tax credits and child benefit, long-term youth unemployment almost tripling in my constituency, I do not believe it is the right time to give a tax cut to people on exceptionally high incomes.”