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Firms may quit over 50p tax, Lib Dems told

By Andrew Grice

Companies and entrepreneurs could quit Britain unless the 50p top rate of income tax is abolished, David Laws, the Liberal Democrat former Cabinet minister, has warned.

Mr Laws warned senior Lib Dems that their attacks on the Conservatives could backfire, by making it harder to win policy concessions from their coalition partners.

His warning came after three possible successors to Nick Clegg - Tim Farron, Vince Cable and Chris Huhne - used their speeches at the party's Birmingham conference to distance themselves from the Tories.

The ex-City banker accepted the 50p rate on earnings above £150,000 should remain "for the foreseeable future" but insisted it must be "temporary".

Mr Laws said: "If you got stuck with the 50p rate of tax for a long period, particularly if people felt it was permanent, then there is a risk not only that some people might decide to resite overseas, but particularly that where firms and leadership teams face a choice of coming to the UK or some other business centre, that they might not opt for the UK.

"They are unlikely to take that decision, given that they know the coalition believes the 50p rate should be temporary."

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