News One

Minister calls for tax increase for high earners.

Peter Hain, the newly appointed leader of the Commons, is today expected to propose that the higher income tax band should be increased, in order to allow those of middle and low incomes to pay lower taxes.

The top rate of income tax currently stands at 40%, and applies to those earning over £35,115.

In a speech to the Bevan Foundation in Cardiff, Mr. Hain is expected to highlight the fact that many public sector workers, including teachers and the police, are caught within this band.

If a 50% tax on earnings over £50,000 was introduced, together with a 60% tax for those earning over £100,000, the basic rate of 22% could be extended to apply to all earnings up to £50,000.

The Treasury has dismissed the issue, asserting that such decisions are under the control of Chancellor Gordon Brown, and insisting that the Government will honour its manifesto promise not to increase income tax rates.