Ed Balls has pledged that a Labour government will restore the top rate of tax to 50%, risking that the party will be seen as anti-business. David Smith reports
Twenty-six years ago the Conservative chancellor Nigel Lawson cut the top rate of income tax from 60% to 40%. Not only did the top rate come down by a third but other higher rates (45% 50% and 55%) disappeared overnight.
The change was not made without protest. Lawson’s 1988 Budget was one of the rowdiest House of Commons occasions in modern times with Labour MPs objecting strongly to the cut in the top rate.
But it stuck. For more than two decades the top rate of income tax remained at 40% despite periodic pledges from Labour and the Liberal Democrats...
