Economists attack 50p tax rate

TWENTY INFLUENTIAL economists have called upon Chancellor George Osborne (pictured) to cut the 50p top rate of tax.

In a letter to the Financial Times, the economists said they were "concerned the 50p income tax rate is doing lasting damage to the UK economy". The rate makes the UK "less competitive internationally and... less attractive as a destination for both foreign investment and talented workers".

"It is often portrayed as a justified tax on the rich but the economic damage it causes means that it is against the interests even of ordinary workers who do not pay it," the letter stated.

Among the signatories were Danny Quah, a professor at the London School of Economics, Michael Ben-Gad, professor of economics at City University London, and professors from Cardiff, Leicester, Warwick and Glasgow universities among others. Also included are economists not normally associated with conservative causes such as DeAnne Julius and Sushil Wadhwani, both former members of the Monetary Policy Committee, and Bob Rowthorn, Emeritus professor of economics at King's College Cambridge.

Osborne has indicated that the 50p rate was temporary, but he has said he will wait until HM Revenue & Customs has finished its review on the revenue generated by the top rate of tax before making a decision.

The Institute for Fiscal Studies has previously called the 50p rate a "risk worth taking".