Cabinet under pressure to reveal tax-change benefits

Labour MPs demanded a list of Cabinet members who will benefit from what they have branded “a budget for millionaires”, after Mr Osborne revealed he does not personally pay the 50p rate, despite having a salary of £134,565, rental income from a property in London and a shareholding in his family’s wallpaper firm.

Downing Street insisted that tax arrangements were “a private matter between Ministers and HM Revenue and Customs”.

Mr Cameron’s spokesman declined to say whether the Prmie Minister – who declares rental income from a London property on top of his £142,500 salary – paid the top rate, which is due to fall to 45p in April 2013.

And Mr Cameron responded brusquely when challenged on the issue during a visit to Cumbria.

“My own salary is published, it’s on the record,” he said. “I cut it by five per cent, I’ve frozen it for the whole of the Parliament and I’m quite content to do that, but all my interests are declared and all of them are known about, thank you.”

The row came as a respected economic thinktank said that an additional 1.3 million people on “relatively modest incomes” could be drawn into the 40p income tax band as a result of changes announced by Mr Osborne on Wednesday, bringing the total number of higher-rate payers to five million for the first time.

The Institute for Fiscal Studies also questioned Mr Osborne’s claim that Wednesday’s package would raise five times as much extra revenue from the wealthy than they gain from the top-rate cut.

The “hotch-potch” Budget rested on the “uncertain” assumption that rich individuals who avoided paying tax at 50p will be willing to stump up at the 45p rate, said IFS director Paul Johnson.

Meanwhile, there were indications Mr Osborne’s assault on VAT loopholes was having an impact on business, with the UK’s biggest bakery chain Greggs seeing £20m sliced from its value by a five per cent slump in its share price following the announcement the 20 per cent levy will be imposed on all hot food sales.

Mr Cameron, who visited Greggs’ bakery on Tyneside last year, praised the company in the House of Commons on Wednesday for boosting jobs.

Mr Osborne rejected claims he had produced a Budget for the rich. “We are getting more money from the wealthiest in our country, we’re charging them more when they buy a house, we’re stopping them having unlimited reliefs on their tax which they’ve had under the previous government, and we’ve got rid of a tax rate which everyone around the world looking at it said is costing us jobs and investment,” he said.

Mr Osborne said that he was not personally a top-rate taxpayer.

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