Raising income tax for rich Britons has raised hackles at the CBI.
The head of a business group has criticised the prime minister's handling of the economic crisis.
Speaking in London yesterday at the Confederation of British Industry (CBI) annual dinner, Martin Broughton said that the government had not laid out convincing proposals showing that it would limit debts run up during the recession. Mr Broughton, outgoing chief of the CBI, also said that the planned hike in income tax for those earning over £150,000 a year was "economic vandalism".
In last month's Budget, it was announced that the UK was likely to run up a record deficit of £175 billion this year, equivalent to over 12 percent of annual economic output. The tax change, which will see richer Britons pay 50p in the pound rather than 40p from next April, is intended to help pay back some of these public debts.
"To [tear] up the manifesto commitment to the country’s entrepreneurial class - the major job creators - [with the tax increase] was nothing short of economic vandalism," he commented. "What's more - the tax take is likely to be minimal."
The prime minister responded to Mr Broughton while delivering the keynote speech at the same event. "I do not like doing it as much as you will not like the measure, but I say to you: if we are to restore our public finances … we have a duty to act," he said.
Elsewhere, there was better news for the prime minister yesterday with the release of an International Monetary Fund (IMF) report which broadly praised the government's response to the financial crisis. The economists' group said that the UK had been "bold" and "aggressive" in addressing the downturn.
However, the IMF's own figures suggest that British economic output will drop by over four percent this year.
