Government cancels plans to scrap 50p tax rate for higher earners

Higher earners will not see the controversial 50p income tax rate cancelled anytime soon, the prime minister has confirmed in a bid to reassure taxpayers that the government is not pandering to the rich.

David Cameron and George Osborne have come under increasing pressure to scrap the 50p tax for anyone earning a salary over £150,000.

Tory backbenchers argue the tax does not raise enough money and is damaging the economy by encouraging wealthy entrepreneurs to move abroad.

However, with public sector pay now frozen until 2015, plans to scrap the 50p tax in 2015 have been cancelled to ensure that those with the broadest shoulders bear the largest burden, reports claim.

HMRC meanwhile is expected to publish a report in the next few weeks showing how successful the tax has been in raising revenue.

In an interview David Cameron said: ‘When you’re taking the country through difficult times and difficult decisions you’ve got to take the country with you. That means permanently trying to make the argument that what you’re doing is fair and seen to be fair.

There has been no further suggestion that a ‘mansion tax’ targeting property millionaires will be introduced in the Budget this year as a replacement to the 50p tax.

Speaking on the BBC One's Andrew Marr show yesterday meanwhile Cameron also pledged to end big financial rewards for business failures, which he said make 'people's blood boil'.

Amid promises of a new package of pay measures for business executives, Cameron said: ‘The absolute key change where you make more information transparently available, you empower shareholders to vote on those things and you stop the rewards for failure’.