The UK government’s plan to raise the top rate of income tax to 50 per cent is like Cyrano de Bergerac’s nose: it is impossible not to stare at it, even though the focus of attention deserves to be elsewhere. Its aim of wrong-footing the opposition Tory party is clear enough. A sensible party should be able to sidestep that trap, even though the tax rise is already sparking rightwing anger. More importantly, it should not distract from hard truths about reshaping the UK tax system.

In defiance of its 2005 election manifesto, Labour now intends to levy a 50 per cent rate from April next year on those with incomes of more than £150,000 a year. As fiscal policy, this is flawed. It is not broadly based enough to raise significant revenue and may even reduce the taxes raised from the wealthy if they curtail spending and consult their accountants.