Brown to resist calls for raising tax rate

Gordon Brown will reject proposals from a Labour think-tank to bring in a 50p top rate of income tax to help fund the Government's plans to abolish child poverty.

Mr Brown favoured raising the 40p in the pound tax rate when Labour was in opposition but has cooled on the idea. Allies say he believes a 50p rate would not raise as much revenue as its advocates claim because people would find ways to avoid it and it would send a negative signal about Britain to foreign entrepreneurs.

The Fabian Society's report on life chances, which was disclosed in The Independent on Monday, is regarded as a blueprint for how a Brown government would tackle child poverty.

Launching the report last night, David Miliband, the Communities minister, said: "Every government needs to renew as well as deliver. Let this report be the start of a process that leads to a manifesto and a new government that makes choice not fate the expectation of the majority."

He said: "A strategy for narrowing the gap in life chances must include tax and benefit changes, but go beyond it. We must use the power of the state, to disperse power - to create markets, public services and a society that enable citizens to be players not spectators."