Business Bosses Slam Labour's 50p Tax Rate

A group of senior business leaders has written an open letter criticising Labour's plan to raise the top rate of tax.

Shadow chancellor Ed Balls confirmed at the weekend his party would restore the 50p tax rate if it gets into power at the next general election.

Business figures have been quick to criticise the plan, and today the heads of 24 companies warned in a letter to The Daily Telegraph that the 50p tax rate would halt the economic recovery and cost jobs.

The letter's signatories include Ocado chairman Sir Stuart Rose, West Ham United vice chairman Karren Brady, billionaire businessman Richard Caring and Kingfisher chief executive Sir Ian Cheshire.

"We think that these higher taxes will have the effect of discouraging business investment in the UK," the letter said.

"This is a backwards step which would put the economic recovery at risk and would very quickly lead to the loss of jobs in Britain."

Sir Stuart Rose led Marks & Spencer for six years

The 50p - or 50% - "additional rate" tax, which is payable on income above £150,000, was cut to 45% on April 6 last year.

Another signatory, Pimlico Plumbers founder Charlie Mullins, told the paper that raising the tax rate to 50p would be "suicidal".

He warned it could trigger an exodus of investors, pointing to the example of France under President Francois Hollande, who raised the top rate of tax to 75%.

"Business people aren't against paying tax, just not at such a punitive rate," he said.

It is not only business leaders slamming the plan. A former Labour trade and investment minister has also accused the party of choosing to "kick" Britain's wealth creators in the row over the 50p tax.

Lord Jones said he expected the shadow chancellor to increase the top rate of tax to 55p or even 60p in government - something Mr Balls has denied.

The ex-director general of the CBI, who is now a crossbench peer, told the BBC: "In the last few months we've got, oh, if it creates wealth let's kick it - really go for energy companies, really go for house-building, bankers, this time it's going to be the high-earners.

Karren Brady is also a signatory

"Are we talking politics or are we talking what's right to create wealth and jobs as a nation?"

The head of the London Stock Exchange Group, Xavier Rolet, also raised concerns at the weekend about its potential impact.

"The right tax rate for entrepreneurs is what motivates investments," he told Sky News on Sunday.

"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."

And London Mayor Boris Johnson also added to the chorus of criticism, branding Mr Balls "stupid" for planning to increase the tax rate.

In his Telegraph column, Mr Johnson urged the Government to cut the rate to 40p to establish some "clear blue water".

But Mr Balls has the backing of Alistair Darling, who introduced the 50p rate when he was chancellor.

Boris Johnson called the shadow chancellor "stupid" over the plan

He told the Sky News Murnaghan programme: "It's part of the deficit reduction plan that he set out and I thought Ed Balls delivered a very good speech yesterday."

Mr Balls defended his proposal, insisting Labour was "a pro-business party".

"This is not an anti-business agenda but it's an anti-business as usual agenda," he told BBC 1'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."

Announcing the 50p plan on Saturday, Mr Balls described Labour as the "party of radical economic change" and said it was "speaking up ... for working people" facing a "cost of living crisis".

He said the country is "crying out for real and lasting change" and claimed the Prime Minister and the Chancellor are "out of touch" with voters.

And 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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