Brown defends tax increase

Date: 22nd May 2009

Gordon Brown has hit back at criticism over his government's decision to increase the top rate of tax for high earners.

The prime minister, speaking at the Confederation of British Industry (CBI) annual dinner, explained the move was necessary to stimulate the UK economy during the current global recession and argued it was a crucial step to help reduce the country's debt burden.

"I regret the fact that in our plan for sustainable public finances, which includes very substantial efficiency savings in the public services, we have also had to take decisions on taxation," he said.

Mr Brown added: "It is not my desire or my wish, or the chancellor's desire or wish, to raise the top rate of tax. That is not something that we wanted to do."

The decision to raise the rate of tax was criticised by the CBI during the event, with outgoing president Martin Broughton describing it as "economic vandalism".

He also warned it would hit British entrepreneurs, damaging small businesses throughout the country, but Mr Brown rejected the claims, insisting that the economy was strong enough to endure the extra tax burden.

Meanwhile, Accountancy Age reports HM Revenue and Customs could be on the verge of recouping £2 billion in unpaid tax from offshore savers.

The figure has been predicted by PricewaterhouseCoopers as the government prepares for its second tax amnesty.