The real 50p split

Nick Clegg’s interview on Andrew Marr this morning subtly shifted the Lib Dem position on the 50p tax rate. When Marr asked him what he would do if the George Osborne commissioned HMRC study showed that it raised no money, Clegg replied ‘then I of course think we should look at other ways in which the wealthiest pay the amount that we’d expected through the 50p rate.’

So, in other words, he’ll accept its abolition if something else is put in its place. But, crucially, Clegg wants any replacement to raise not what the 50p rate actually raises but what it was supposed to raise.

This presages the next debate in government over 50p. The Tories think that any tax that replaces the 50p rate should only make up for what the 50p rate actually raises, which they expect is far less than the £2.4 billion that the Treasury projects that it does. But Clegg this morning has made clear that the Liberal Democrats want any new tax to raise £2.4 billion. This — not the headlines about Clegg vowing to stop Osborne from abolishing the 50p rate — is where the real division in the coalition is over the issue.