Field proposes 50 per cent tax for the rich

FRANK FIELD, the former Minister for Welfare Reform, who resigned from Tony Blair's government, is to call for the rich to pay higher income tax after the next general election.

The Prime Minister was urged by Mr Field to reconsider the pledge not to raise taxes and for the next general election manifesto to allow a new upper tax rate of 50p in the pound to be imposed on the better off.

"A 50 per cent tax rate on incomes over pounds 100,000 a year would play some part in mitigating the cruditiies of a market-reward system and put Labour firmly in the radical camp," he said.

Although Mr Field resigned as social security minister in the last reshuffle after refusing a new job, his call for a review of Labour's tax pledges is likely to win support among Labour's rank and file.

A 50p tax band was supported by Gordon Brown, the Chancellor, before the general election but was vetoed by Mr Blair on the ground that it would spread fears among the voters that Labour had not changed, and would resort to "tax and spend" habits in Government.

It was in order to nail that impression that Mr Blair insisted on making the pledge to the electorate, but he is under increasing pressure to drop it for the next election.

He faced calls at this week's TUC conference by trade union leaders for higher taxes to damp down demand. A commission has been established under Lord Plant by the centre-left think tank, the Fabian Society, to rethink Labour's fear of taxation.

Mr Field said in this week's New Statesman that the Government must abide by a pledge made in 1997 not to raise income taxes in the current Parliament but "it was not a pledge for ever".

"Ministers may rant against the rises in boardroom salaries but ranting is not enough. You have to do something about it. You have to change the tax structure," Mr Field said.

The man charged with "thinking the unthinkable" for Mr Blair will take his proposals first to the Liberal Democrats' conference next week before launching a new book at Labour's Blackpool gathering.

Mr Field looks set to become a thorn in the Government's side with a string of radical challenges to the leadership on this critical issue.

Such a move would raise around pounds 1.5bn for the Exchequer, Mr Field estimates.

But other forms of tax such as offering an insurance base for much of NHS expenditure are also suggested.