Sadly, the 47p tax rate is here to stay

Nothing is more permanent than a ‘temporary’ government tax, as George Osborne is reminding us. When Alistair Darling proposed a 45p rate in 2008, even the Institute of Fiscal Studies said it would lose money – but Darling said it would be ‘temporary’. Brown upped it to 50p, Osborne took it back down to 45p but the ‘temporary’ status has been revoked. The Sunday Times has today splashed on Osborne’s interview with Robert Winnett of The Daily Telegraph, where the Chancellor said ‘I’m very happy with the 45p rate of tax. We’ve got it to a good place where it’s competitive.’ Britain had the highest top rate of tax in the G20, now it has the third-highest. If Osborne is “very happy” with this self-evidently uncompetitive rate (de facto 47 per cent after National Insurance, 53 per cent when the employers’ per cent is included), then it’s an important sign of how fiscal policies have shifted to the left.