Blair Rules Out Increase In Top Rate Of Tax

by Robert Lee, Tax-News.com, London

10 February 2005

British Prime Minister Tony Blair has sought to distance himself from comments made by a former advisor, who called for an increase in income tax for top earners to make more money available for investment in public services.

Peter Hyman, Mr Blair's chief speech writer when he was in charge of Number 10’s strategic communications unit, stated in a recent radio interview that he would be in favour of a new 50% top rate, and claimed that the idea had already been discussed at the highest levels of the Government.

"One of the things I would do is to have a new top rate of tax for very wealthy earners. I would, incidentally, cut taxes a little, but at the bottom,” Mr Hyman, who now works in a state school, told BBC Radio 4’s Today programme on Monday.

"I think there is a growing case being made for a new top rate. But I am not sure that Tony Blair is persuaded of the case,” he observed.

Responding to Hyman’s comments whilst facing questions from the House of Commons liaison committee, which comprises the chairmen from the various select committees, Blair explained that: "I am not in favour of raising the top rate of tax which is what's often talked about in these circumstances."

“Sometimes figures can be misleading about the gap between the wealthy and the poor," the Prime Minister added.

Blair was also questioned on the issue of inheritance tax, which is affecting many thousands of modestly wealthy homeowners as a result of soaring house prices. However, he refused to be drawn on reforms to IHT, such as the introduction of a banding system to ensure that the wealthiest pay the most, stating that it was a matter for the Chancellor, Gordon Brown, to decide.

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