Tony Blair appeared to rule out any increase in the top rate of income tax when he appeared before a committee of MPs yesterday.

Labour MP Barry Sheerman asked the prime minister whether he agreed with the view of former speechwriter Peter Hyman, who had called for a top rate of 50% for the wealthy.

Blair replied: “I am not in favour of raising the top rate of tax”. He argued that in the debate about the gap between rich and poor, sometimes figures “can be a bit misleading”.

He added: “Let us be clear, there have been hundreds of thousands of children and almost two million pensioners lifted out of acute hardship, there are people benefiting from the Working Families’ Tax Credit (sic) and from the minimum wage … These are big changes. Do we need to do more? Yes, we do.

“That is why you have got to continue the programme of investment and reform, but I do not think we should dismiss the progress that is being made.”

Shadow chief secretary to the Treasury George Osborne demanded “a clear cut pre-election statement on how the Premier plans to pay for Labour’s spending plans”.

The Tories claimed that Hyman echoed the views of many Labour MPs who support Liberal Democrat calls for a 50% tax rate on earnings over £100,000 a year.

Osbourne added: “We will keep repeating this question until it is answered: ‘Mr Blair, which taxes are you going to raise?’

“His failure to give a straight answer highlights the choice at the next election: more waste and higher taxes under Mr Blair, or value for money and lower taxes with Conservatives.”

The prime minister also ruled out levying taxes on cheap air travel, arguing that the only realistic solution to environmental damage was to look at what science and technology had to offer.

Andrew Goodall
editor@taxzone.co.uk