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Chancellor called on to scrap "damaging" 50p tax rate

A group of high-profile business experts urge George Osborne to rethink the income tax rate.

Economists have called for the scrapping of Britain's 50p top rate of income tax, the Guardian reports.

Faced with concerns about a double-dip recession, Chancellor of the Exchequer George Osborne is under pressure to abolish the 50p rate "at the earliest opportunity", in order to allow economic growth.

On Tuesday Osborne confirmed that the government does not intend to rethink its approach to tax and spending, but that - due to the credit crunch - already weak downwards estimates for growth would have to be revised.

In a speech to the City, the Chancellor claimed that the coalition's tough economic approach and early tackling of the deficit had already placed Britain "ahead of the curve" and in a position of control over its economic future.

However, a letter from 20 business experts appeared in Wednesday's Financial Times, stressing that the 50p tax rate is doing "lasting damage to the UK economy". The group of economists, including Cambridge University academic Bob Rowthorn and former members of the Bank of England's monetary policy committee DeAnne Julius and Sushil Wadhwani, claims that the tax rate "punishes" entrepreneurs.

Former Chancellor Alastair Darling rejected the economists' fears, claiming that the scrapping of the 50p rate, which was revealed in his 2009 budget, would be "grossly unfair".

The economists are calling for the implementation of an "internationally competitive tax regime", which they believe will stimulate the economy.

Read the full article here.

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.