Labour and the 50p rate: principle or pragmatism?

While Miliband once said he would "keep the 50p rate permanently", Balls says he would "rather get tax rates down".

As Labour begins to offer greater detail on the fiscal stance it will adopt in 2015, the question of whether it would restore the 50p tax rate is becoming more insistent. On last night’s Newsnight, Ed Balls gave his standard response that were Labour in power now it would reintroduce it, but that he was unwilling to make tax policy two years ahead of an election. Intriguingly, however, he added that “personally, I’d rather get tax rates down if I could, but I can’t make that promise now on the top rate of tax”.

Balls’s suggestion that he is not wedded to the 50p rate as a point of principle contrasts with what Ed Miliband said in June 2010, when he suggested that the top rate was an important component of a fairer society

I would keep the 50p rate permanently. It’s not just about reducing the deficit, it’s about fairness in our society and that’s why I’d keep the 50p tax rate, not just for a parliament.

Miliband has since generally adopted the line that Labour would bring back the 50p rate “if there was an election tomorrow”, leaving himself with maximum flexibility for 2015, but I suspect that he continues to regard a more progressive tax system as crucial to meeting his aim of reducing inequality. Balls, however, takes a more pragmatic view. The difference in outlook is a good example of what one Labour figure had in mind when they told me that Balls “doesn’t really buy all of this ‘responsible capitalism’ stuff”.