Labour refines "millionaires' tax cut" claim

8 October 2012

While media attention may have switched over the weekend from the Labour Party conference to the Conservative Party equivalent in Birmingham, many of the topics under the microscope have remained consistent.

Both Prime Minister David Cameron and Chancellor George Osborne were quizzed on the weekend political shows about the contribution of the wealthy to reducing the deficit, after Labour leader Ed Miliband accused the Government of "writing a cheque to each and every millionaire in Britain for £40,000" in his conference speech.

As we found at the time, this isn't accurate.

While the reduction in the top rate of tax from 50p to 45p does mean that anyone earning over a million pounds per year would see the taxman take at least £40,000 less from their earnings, A 'millionaire' isn't someone with an annual income of £1 million or more, but rather "a person whose assets are worth at least a million pounds."

This is important, as certain other tax changes made by the Government - such as the increase in Stamp Duty for properties bought for £2 million or more - are actually expected to take more money from richer households than that which the Treasury relinquished through the cut in the 50p tax rate.

So it is encouraging to see today that Labour seems to have taken these criticisms on board, and is now phrasing the claim more accurately.

Writing to the Prime Minister today, Michael Dugher, Labour's Shadow Cabinet Office Minister told Mr Cameron:

"you have chosen to give 8,000 people earning over £1 million a tax cut of at least £40,000."

While the use of the correctly-phrased claim in a letter hardly puts right the use of an incorrect claim in the party's most high-profile conference speech, we are pleased that Labour has taken note of the error, and we'll be keeping an eye out to ensure that only the accurate claim is used in the future.

Full Fact fights bad information

Bad information ruins lives. It promotes hate, damages people’s health, and hurts democracy. You deserve better.