Financial News

  • 27 January 2014, 6:49

Ed Balls: Labour 50p Tax Rate Not Anti-Business

Shadow Chancellor Ed Balls has defended himself against accusations that he is anti-business over his plans to reintroduce the 50p top rate of tax.

It follows criticism from business leaders and a former Labour City minister who have warned that the move will damage the economic recovery.

Xavier Rolet, CEO of the London Stock Exchange Group, told Sky News: "The right tax rate for entrepreneurs is what motivates investments.

"There are worries and certainly concerns that we do share that increasing the taxation, reversing if you want, the measures that have been taken in the last few years, could impact not only foreign but also domestic investments."

Lord Myners, the former Labour City minister, has also attacked the policy, warning that the economics do not add up and the move would take the party back to the days of "old Labour".

But Mr Balls insisted Labour was "a pro-business party".

"This is not an anti-business agenda but it's an anti-business as usual agenda," he told the BBC's Andrew Marr Show.

"It's absolutely not back to the 1980s or the 1990s. I was part of a government which did very many things to open up markets, make the Bank of England independent, to work closely with business but the reality is we are in very difficult circumstances and because, if I'm honest with you, George Osborne's failure in the last few years, those difficult circumstances will now last well in to the next parliament."

Sky's Darren McCaffrey said: "We have heard a whole succession of business leaders come out and criticise the policy.

"They say it is going to damage British business and drive away talent and could undermine Britain's economic recovery.

"So, this is a significant shift for the Labour Party and it does really worry people in the business community.

"He was forced to admit the move was not going to generate an awful lot of money, but it was about sending a political message to those at the top - they still need to pay their way while the deficit remains in force."

Mr Balls would appear to have public opinion on his side. A Mail on Sunday poll suggests some 60% supported the move, while just 17% were opposed.

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