Byers rails against “cynical” 50p rate
By Alex Stevenson
Former Cabinet minister Stephen Byers said “cynical political reasons” were behind the 50p income tax rate announced in last week’s Budget.
The open attack against Gordon Brown’s government is being viewed as a major shift in stance by Tony Blair’s former political allies within Labour.
Mr Byers, an ex-transport secretary, made his comments in a Budget debate on business and skills yesterday evening.
He told MPs the government could have waited an extra three months, until after next year’s general election, and kept its manifesto promise not to increase the top rate of tax.
“That leads one to consider why the 50p rate was introduced in the first place,” he said.
“When one looks at the fact that it is being brought forward to April 2010, probably just a few weeks away from a general election, and when one considers that it targets a very small number of taxpayers, the only sensible conclusion to draw is that the 50p-rate proposal has more to do with political positioning and tactical manoeuvring than a principled, strategic approach to taxation and the raising of revenue.”
The government has argued increasing the highest rate of tax for the top one per cent of earners was the fairest way to increase revenue during the recession.
Mr Byers said taxing just 350,000 people higher amounts would not “provide the broad base to raise the revenue that will be needed in the present circumstances”.
He dismissed the argument that the increase was an ‘elephant trap’ for the Conservatives, saying it was “so large and well-signposted that even the most myopic old tusker would have little difficulty avoiding it”.
Instead Mr Byers, the MP for Tyneside North, said it was Labour who would regret the decision “for many years to come”.
John Reid, a Blair troubleshooter who served in multiple Cabinet roles, said Mr Byers was making a “very interesting case”.
Observers say senior Blairite figures have, on the whole, watched Mr Brown’s premiership unfold from the sidelines. Some believe Mr Byers’ comments could represent a turning point as the party’s old divisions emerge once more.
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