Newspaper article The Evening Standard (London, England)

HUGE CABINET RIFT OVER TAX; Hain Call to Raise Top Rate Enrages Blair and Brown

Newspaper article The Evening Standard (London, England)

HUGE CABINET RIFT OVER TAX; Hain Call to Raise Top Rate Enrages Blair and Brown

Article excerpt


A MASSIVE Cabinet row exploded today over a plan to tax the rich more to ease the burden on middleincome and low earners.

The move, which could see the 40 per cent top rate of income tax raised to 60 per cent or more, came from the newly-appointed Leader of the Commons, Peter Hain.

In a speech to be delivered tonight but leaked in advance, he says: "How can we ensure that hardworking middle-income families and the low paid get a better deal, except by those at the very top of the pay scale contributing more?"

The proposal was instantly slapped down by Tony Blair and a furious Gordon Brown.

The Prime Minister, confronted with a Cabinet bust-up while attending the EU summit in Greece, said: "Tax policy is not going to change. We're not going to be raising the top rate of tax."

His annoyance at the suggestion that Labour could be saddled once again with a soak-the-rich reputation was evident. He added: "I'm not writing our next manifesto now but I haven't spent the last 10 years ensuring that the Labour Party's in a position where we say 'we're not raising top rates of tax' in order to change the position now."

Mr Blair added: "My concern is not to penalise the people who are successful and doing well and earning a lot of money. My concern is to lift up the incomes of those at the lower end of the income scale."

A Treasury spokesman said in response to Mr Hain's proposals: "It is the Chancellor in Budgets that makes decisions on taxation."

And, in an extraordinary move, Mr Hain was ordered by Mr Blair's communications chief, Alastair Campbell, to go on air and back down.

Mr Hain, who had earlier refused to be interviewed, suddenly agreed to appear on Radio 4's Today programme.

Although he retreated, he did not surrender. In an astonishing gesture of defiance against the Government's two most senior figures, he said that, although he was not proposing punitive high tax rates, he still believed that "those at the top of the scale would be prepared to contribute a bit more".

He said: "I am a member of the Cabinet and I think I am entitled to ask the question and ask for an honest debate."

Downing Street was unable to say whether Mr Hain would deliver his speech in Cardiff tonight as drafted. …

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