The proposal to introduce the higher rate for those earning over pounds 100,000 put pressure on Tony Blair to adopt a more radical policy on poverty. But Mike O'Brien, a Labour treasury spokesman, said: "Labour will never impose tax hikes for the sake of it. We have a responsibility to the British people to be prudent."
An estimated 750,000 low earners could be lifted out of tax altogether with pounds 1.1bn raised from the higher tax on about 120,000 taxpayers who earn top salaries. The Liberal Democrat policy on poverty - called a programme for a "helping hand" - echoed Labour's promise of a "hand up, not a hand out". But Labour has so far refused to commit itself to a higher rate of tax to pay for its plans.
Tory leaders attacked theproposal to raise taxes, but Liberal Democrat sources said their plans were modest compared to Germany (53 per cent on earnings over pounds 27,000) or France (57 per cent on earnings over pounds 27,000). Mr Ashdown said the pledge to raise taxes for those earning over pounds 100,000 was part of his party's strategy of adopting a distinctive image.Reuse content