Osborne budget cuts top tax rate

The highest British tax rate would be cut from 50 percent to 45 percent while some old-age allowances would be frozen in the budget introduced Wednesday. George Osborne, the Conservative chancellor of the exchequer, delivered his budget speech, insisting his plan is a fair one, The Guardian reported. He pointed to higher taxes on sales of the most expensive homes and the closing of some tax loopholes, and said an increase in personal deductions means 1 million more people will pay no income tax. Leaders of the Labor Party labeled the loss of income to pensioners a \"granny tax\" and said the elderly would lose an average of 84 pounds ($133) a year. Critics said the cut in top tax rates would benefit the 300,000 richest households in the country. Osborne argues the high top tax rate drives the rich out of the country and brings in comparatively little revenue. Deputy Prime Minister Nick Clegg, leader of the Conservatives\' Liberal Democrat partners, embraced the budget. \"This is a budget every Liberal can be proud of,\" Clegg said. \"We are very proud that we are taking 2 million people out of paying income tax altogether.\" But Ian Birrell, a former speechwriter for Prime Minister David Cameron, expressed doubts. \"By giving in to an alliance of the right and the rich, George Osborne has made a basic blunder that sends a missile into six years of Tory modernization,\" he said on the Guardian Web site.