LABOUR SHADOW chancellor Ed Balls yesterday rejected claims that his pledge that a Labour government will bring back the 50p top rate of income tax is part of an ‘anti-business agenda’.
Responding to an accusation by Foreign Secretary William Hague that it sent ‘the wrong signal’
about Britain, Balls insisted it was a ‘fair’ measure to be used while Labour reduced the ‘huge’ deficit it would inherit if it won the 2015 election.
He said that while those earning more than £150,000 should pay more, he wanted to see overall taxes falling.
The previous Labour government created a new 50 per per cent tax band in 2010 for anyone with income of more than £150,000, but the coalition cut it to 45 per cent last April.
Balls told the Andrew Marr show yesterday morning that the Tories had been ‘foolish’ and had ‘fed resentment’ at a time of deep austerity.
He said: ‘I don’t think it is justified, when people have seen their taxes go up and most people have seen their living standards fall, cutting income tax for the highest earners, which is what George Osborne and David Cameron have done.’
Balls added: ‘What we are talking about is going to 50p while we get the deficit down.
‘It is a fair way to get the deficit down. The phrase is “we are all in it together”, that is part of the policy.’
Balls had made his pledge in a speech to the Fabian Society Annual Conference on Saturday.
He also announced a binding fiscal commitment that the next Labour government will balance the books, deliver a surplus on the current budget and get the national debt falling in the next Parliament
He told his audience: ‘After three years of economic stagnation and with the sustainability of the recovery still uncertain, we stand to inherit a very difficult fiscal situation in 2015.’
He added: ‘With the deficit we inherit currently set to be nearly £80 billion and the national debt still rising, it will be up to the next Labour government to finish the job.
‘This means that delivering change – on living standards, on skills and innovation and on jobs for young people, while safeguarding our NHS and vital public services – will be more difficult than at any time in living memory.’
He stressed that ‘we must make sure the sums add up. We cannot and will not duck the hard choices ahead.’
He revealed: ‘Chris Leslie, the Shadow Chief Secretary to the Treasury, has already begun our zero-based review of public spending.’
He went to say: ‘But I want to go further still. So I am today announcing a binding fiscal commitment.
‘The next Labour government will balance the books and deliver a surplus on the current budget and falling national debt in the next Parliament.’
He added: ‘And because we will need an iron commitment to fiscal discipline, I have also asked the Office for Budget Responsibility to independently audit the costing of every individual spending and tax measure in Labour’s manifesto.’
Appealing to Tory Osborne, he said: ‘I urge the Chancellor to work with us to make this happen ahead of the next general election.’