A growing argument about the 50p rate

With the Eurozone and American economies both at risk of a double dip recession, how to get the British economy moving again is going to be one of the defining political arguments of the autumn. A first salvo in that fight has been fired this morning with a letter to the FT from 20 economists calling for the immediate scrapping of the 50p rate because of the harm that it is doing to the economy as a whole.

This letter will, one suspects, be privately welcomed by the Chancellor who is looking for ways to, at the very least, cut the rate. He has become increasingly convinced that it is making it harder to get a proper recovery going.

But, politically, offering a tax cut to the rich is a hard sell at the moment. I suspect that if 50p rate does go it will have to do so as part of a wider package of measures. This might well include accelerating raising the income tax threshold to £10,000, which would please the Lib Dems, and, possibly, the reintroduction of the 10p rate that Gordon Brown infamously abolished in his final budget.