Twenty of the UK's top economists have warned in a letter that the UK's top tax rate of 50p is doing 'lasting damage' to the economy and is therefore 'self defeating'.

The letter has been published today in the Financial Times and has been signed by former Bank of England Monetary Policy Committee members as well as university professors.

In the letter they say that they welcome the government's aim of putting economic growth at the top of the agenda, but whilst other economies have returned to pre-recession output levels the UK hasn't.

they are also say that the UK has “one of the highest personal tax regimes in the industrialised world, making it less competitive internationally, and making us less attractive as a destination for both foreign investment and talented workers.

The 50p tax rate hits in the region of 320,000 UK taxpayers who earn over £150,000 a year. This makes up about 1% of all taxpayers.

The press release says though that the top 1% of taxpayers put in about 14% of the income tax raised by the government. And that the UK has dropped from 4th for the world's lowest tax burden and evasion on the World Economic Forum's Competitiveness Report in 1997  to 95th today.

In the letter the economists call for the government to drop the 50p top tax rate 'at the earliest opportunity as part of a package of measures to stimulate growth'. And it goes on to warn that only by getting back to an internationally competitive tax regime will the UK once again 'enjoy long term sustainable economic growth'.

The organiser of the letter, Bridget Rosewell of Volterra Consulting, said “The 50p tax is disastrous for the British economy. It sends a terrible message to entrepreneurs around the world that Britain does not want their money, investment or skills.”

Letter Signatories:

Prof Michael Ben-Gad City University London Professor of Economics
Prof Danny Quah London School of Economics Professor of Economics
Dr Sushil Wadhwani, CBE Wadhwani Asset Management LLP Ex-MPC
Ms Deanne Julius CBE Chatham House Ex-MPC
Mr Roger Bootle Capital Economics
Ms Bridget Rosewell Volterra Consulting
Prof Bob Rowthorn University of Cambridge Emeritus Professor
Prof Nick Bosanquet Imperial College Professor of Health Policy
Mr Paul Ormerod Volterra Consulting
Prof Anne Sibert Birbeck College, University of London Professor of Economics
Prof Patrick Minford Cardiff University Professor of Applied Economics
Prof Keith Pilbeam City University London Director of Business Economics
Prof Peter Sinclair (University of Birmingham) Signing in a personal capacity.
Prof Kent Matthews Cardiff University Head of Department
Prof Robert McNabb Cardiff University Professor of Economics
Prof Panicos Demetriades University of Leicester Professor of Economics
Prof Stephen Hall University of Leicester Professor of Economics
Prof Mark Harrison University of Warwick Professor of Economics
Prof Ronald MacDonald University of Glasgow Adam Smith Professor of Political Economy
Prof Gianni De Fraja University of Leicester William Tyler Professor of Economics

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