Lawson: axe 'foolish' 50p tax rate
Former Conservative chancellor Nigel Lawson has urged George Osborne to axe the 50p top rate of income tax, warning it is "dangerous" and "foolish" to leave it in place.
Lord Lawson admitted it would be politically difficult for the Government to slash the levy on the country's top earners but insisted it would be "better" to push the change through soon.
Mr Osborne is coming under intense pressure from Tory backbenchers to scrap it after an open letter from 20 economists warned on Wednesday it was damaging the recovery from recession.
Lord Lawson, who slashed the levy from 60p to 40p in 1988, said it is "very dangerous, very unwise, very foolish" to keep the top rate in the UK higher than in competitor countries.
Speaking on BBC Radio 4, he said: "The politics are slightly difficult but I think it should be done. It would be extremely beneficial to the economy. I don't think it would cost the Exchequer any money at all.
"And you have to remember that when I brought (the) top rate down to 40% - 40 pence in the pound - it was then the lowest rate. Other countries followed so not only has that advantage gone but we are now at a disadvantage with all our major competitors because they all have top rates which are less than ours. And that is very dangerous, very unwise, very foolish."
But one of Britain's leading businessmen called on the Government not to scrap the 50p rate, which affects those on more than £150,000.
Sir Stuart Rose, the former executive chairman of Marks & Spencer, said he would even be willing to pay more tax in order to help the national finances.
He told the BBC: "I don't think that they should reduce the income tax rate. How would I explain to my secretary that I am getting less tax on my income, which is palpably bigger than hers, when hers is not going down? If in the short term a case was made for me to pay more than 50% tax, which would help UK plc, I personally - Stuart Rose - would be prepared to pay more tax."
Mr Osborne and Prime Minister David Cameron have made it clear they regard the 50p rate - introduced by Labour's Alistair Darling in 2009 - as "temporary". The Chancellor has ordered HM Revenue and Customs to carry out analysis of whether the rate is even bringing in any extra money, amid warnings it will easily be avoided by the super-rich, some of who may even move abroad.