'Labour will bring back 50p income tax for top earners' says Ed Balls

Shadow Chancellor would shift the burden of the deficit to the rich, raising £10bn in three years

Political Editor

The controversial 50p tax rate would be brought back by a Labour government, Ed Balls has vowed.

Top earners will be hit with a tax rise under a Labour government, Ed Balls announced today, as he pledged to reduce the UK’s deficit by ensuring those with the “broadest shoulders bear a fairer share of the burden”.

Battling to restore Labour’s dented economic credibility, the Shadow Chancellor said the top rate of tax on incomes over £150,000 would be increased from 45p to 50p, which he claimed would raise £10bn over three years.

Yet the pledge was criticised by the Liberal Democrats, Labour’s potential suitors in a coalition next year, while business chiefs and the Conservative Party also warned that reintroduction of the 50p rate would be a “disaster”.

While Labour has maintained a lead over the Conservatives in the polls, Ed Miliband and Mr Balls lag behind David Cameron and George Osborne on economic competence. In a speech to the Fabian Society yesterday, Mr Balls tried to address this with a “binding fiscal commitment” that a Labour government would deliver a budget surplus by the end of the next Parliament. The Chancellor has pledged to deliver a surplus by 2019, a year earlier than Labour.

Labour toughens fiscal policy with promise to reduce national debt

With Mr Osborne setting out plans for yet more cuts to welfare spending, the Shadow Chancellor said reintroducing the 50p rate would reduce the deficit in a fairer way. A Labour government will also introduce a lower 10p starting rate of tax, helping those on middle and lower incomes. The 45p rate was increased to 50p by Gordon Brown before the last election, then slashed again by Mr Osborne in 2013.

Mr Balls said: “When the deficit is still high, when tough times are now set to last well into the next parliament, when for ordinary families their real incomes are falling and taxes have risen, it cannot be right for David Cameron and George Osborne to have chosen to give the richest people in the country a huge tax cut ...

“For the next Parliament, we will restore the 50p top rate of tax for those earning over £150,000, reversing this unfair tax cut for the richest 1 per cent of people, and cutting the deficit in a fairer way.”

HMRC figures show that people earning over £150,000 paid £9.5bn more in tax in the three years when the 50p top rate introduced by Labour was in place than had been estimated by the Government.

But Danny Alexander, the Chief Secretary to the Treasury who is likely to be a key figure in any 2015 coalition negotiations, dismissed the commitment. “Labour’s answer is to borrow more over a longer period, which will leave a higher burden of debt to be dealt with by future generations,” he said.

Financial Secretary to the Treasury Sajid Javid said: “Labour got us into a mess by spending too much, borrowing too much and taxing too much. And now Ed Balls is proposing more spending, more borrowing and more taxes.”

Simon Walker, director general of the Institute of Directors, said Mr Balls’s announcement would “significantly damage Labour’s credibility with the business community”.

 

Start your day with The Independent, sign up for daily news emails
News
newsAnother week, another dress controversy on the internet
Life and Style
Scientist have developed a test which predicts whether you'll live for another ten years
health
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
news... and what your reaction to the creatures above says about you
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telesales & Customer Service Executive - Call Centre Jobs

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Ashdown Group: Finance Manager - Covent Garden, central London - £45k - £55k

£45000 - £55000 per annum + 30 days holiday: Ashdown Group: Finance Manager - ...

Ashdown Group: Systems Administrator - Lancashire - £30,000

£28000 - £30000 per annum: Ashdown Group: 3rd Line Support Engineer / Network ...

Recruitment Genius: Graduate Web Developer

£26000 - £33000 per annum: Recruitment Genius: A Web Developer is required to ...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn