U.K.’s Alexander Says He’d Block Tory Moves to Cut Top Tax Rate

Chief Secretary to the Treasury Danny Alexander said he’ll block any move by his Tory coalition partners to cut the U.K.’s top rate of income tax, distancing himself from Conservative policy as elections near.

The comments by Alexander, a Liberal Democrat, are a response to speculation that Prime Minister David Cameron’s Conservatives are planning to cut the tax rate for the U.K.’s highest earners to 40 percent from the current 45 percent.

“I think the 45 pence rate is the right place to be,” Alexander was cited as saying in an interview with the Daily Mirror newspaper published today. “I wouldn’t go to cutting below 45 pence –- that would happen over my dead body. It’s better to say we are going to stick where we are.”

The opposition Labour Party pledged last month to reinstate an increase in the top tax rate to 50 percent which was reversed by the coalition government. With polls suggesting such a move would have widespread support, Alexander’s remarks underscore his party’s desire to distinguish itself from the Conservatives, who Labour say favor the richest.

Asked about Alexander’s comments in an interview with BBC Radio 4’s Today program, London Mayor Boris Johnson, a Conservative, said he could envisage a move to cut the rate when his party sets out an updated policy platform.

“Sooner or later there will have to be a new Conservative manifesto,” he said. “I don’t think it is reasonable to keep U.K. tax rates higher than other competitive countries. I don’t see why we shouldn’t bring it down.”

While Cameron said last month that future tax cuts would be targeted “at the lowest paid,” he has refused to reject cutting the rate of income tax for those earning more than 150,000 pounds ($245,000) in the future.

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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