Gerhard Schröder's bid for a third term as German chancellor is to take a sharp leftwing populist turn after his Social Democratic party (SPD) said on Sunday it would campaign for a new “tax on the rich”.

The party's top executive, meeting in Berlin last night, said its electoral manifesto would include a three-point surcharge, to be added to the top 42 per cent rate of income tax, for anyone earning more than €250,000 (£165,000, $300,000) a year.