His comments were made on BBC Radio 4’s Today programme and are expected to be more fully fleshed out in a speech in Cardiff tonight.
But the government moved quickly – the Treasury said it would continue to honour its manifesto commitment not to raise the top rate of income tax, which currently stands at 40% for those earning £30,500 or more.
A spokesman for the government said: ‘At no stage has Peter Hain raised these issues with the Treasury’ adding that it was the chancellor who made decisions on taxation.
Predictably, the Tories jumped on Hain’s comments, accusing the government of wanting to tax more, spend more and fail more.
Liberal Democrat shadow chancellor Matthew Taylor said Hain’s comments ‘exposed Gordon Brown’s dirty secret – that under Labour ordinary taxpayers are paying more while the very rich have been protected’.