Withdraw 'pointless' 50p tax rate, says George Osborne

George Osborne has confirmed he wants to scrap the 50p top rate of tax because it is not raising significant amounts of money for the Treasury.

The Chancellor branded the 50p rate "uncompetitive" and said there was "not much point" in having taxes that brought in little revenue.

In an interview at the weekend, he said the tax was not "a lasting rate" and indicated that he believes the current top rate of tax will drive businessmen and wealth creators out of Britain at a time when the Government wants them to create jobs to help boost growth.

The Independent revealed earlier this month that Mr Osborne was considering scrapping the levy after Treasury analysts predicted that it would raise only marginal amounts. At the time, this was dismissed by Mr Osborne's aides. But yesterday he insisted: "There is not much point in having taxes that are very economically inefficient.

"I have said with the 50p rate I don't see that as a lasting tax rate for Britain because it's very uncompetitive internationally, and people frankly can move. What is it actually raising? It's only been in operation for a year this tax."

The Chancellor's intervention will cheer Conservative backbenchers but puts him on a collision course with senior Liberal Democrats, who have said cutting taxes for the poor should be a priority.

HM Revenue & Customs is currently reviewing the rate to see exactly how much money it raises – with the results due next January.