Apprentice star Lord Sugar backs top rate tax cut

21/03/12

The Apprentice star and Labour peer Lord Sugar has backed the tax rate cut for top earners.

Chancellor George Osborne has reduced it from 50p to 45p, starting next year, as well as bringing in tax cuts for low earners.

"I agree, it's a wise thing to do," he said. "The original 40p tax rate was in for many years.

"A lot of business people that came here to the UK felt at the time it was a reasonable amount to tax them."

The 50% income tax rate was introduced by the Labour government in 2010 and applies to anyone earning more than £150,000.

The Conservatives have always disliked it.

Although the Labour party want it to remain at 50p, Lord Sugar believes it's not worth keeping.

Recession

"50p doesn't seem much more than 40p or 45p but it's a psychological thing isn't it," he said.

"You start to think about half your income being paid away in tax.

Let's hope the government does something to lift the markets and encourage young people to get on and be more enterprising. That will help boost a bit of business
Lord Sugar

"I think it'd be a clever move to reduce it because I don't think it raised much money anyway."

Taxing the super-rich was always planned as a temporary measure to bring in more money during the recession.

But there's been controversy over how much it raises.

According to Revenue and Customs (HMRC) estimates for 2010-2011, 275,000 additional rate payers were charged 50% on their taxable incomes over £150,000 and paid £41.4bn.

Lord Sugar, 64, also says more needs to be done to encourage the business industry.

"We need some confidence back in the markets," he said.

"No more of this gloom and doom, especially for young people because that seems to be the message they're always getting."

Business boost

The number of young people looking for work has a hit a new record of 1.043 million taking the rate for 16 to 24-year-olds to 22.3%.

Employment rose slightly in the three months to November 2011 by 18,000 to 29.12 million.

Woman walks past a job centre
Image caption Lord Sugar began his business career by selling car aerials from his van

He said: "Let's hope the government does something to lift the markets and encourage young people to get on and be more enterprising. That will help boost a bit of business."

Lord Sugar is from the east end of London and started selling car aerials and electrical goods out of a van he had bought with his savings of £100.

He now has an estimated fortune of £770m.

Electronics company Amstrad is his largest and best known business venture.

His father was a tailor in the East End and Lord Sugar believes with enough focus, young market traders can make it as business leaders.

"There are a lot of famous stories of people who started businesses on market stalls.

"Obviously it's all to do with having the right product and cutting a niche for yourself in the market. But many people started off in the markets."