No-one earning more than £100k pays more tax

Unsurprisingly, virtually all of the newspapers - and especially the Conservative-supporting ones - led their budget coverage with the announcement of the 50p tax rate.

The coverage and analysis is hyperbolic and in places hysterical. We are led to believe this is the beginning of class war, a cynical move to motivate Labour's core vote; the start of a mass exodus from Britain; taxing people until the pips squeak etc.

Perhaps I can put out some facts and then we can look at those histrionics again.

• First, no-one earning less than £100,000 a year pays any new direct tax as a result of the 2009 Budget.
• Second, the 50p tax rate applies to those earning £150,000 a year or more - put another way, 1% of the population.
• Third, the average UK wage is around £23,600. In Putney, the average is higher because costs and incomes are higher in the capital, but it's still below £40,000.
• And fourth, during much of the Thatcher government the top rate of tax was 45p in the pound kicking in at income levels far, far lower than £150,000.

So a class war? Only if one class represents 99% of us and the other the top-earning 1%. A populist appeal to Labour's core vote? Again, only if Labour's core vote is 99% of the country (if only!).

Just because someone is rich doesn't mean they should be taxed for the sake of it. No one can reasonably argue that a 50% tax rate does that. What it does do is make clear that in unprecedented global economic times, during which governments around the world have had to invest staggering amounts to stabilise the banking industry, to help those hit hardest by the recession and to bring it to an end as quickly and painlessly as possible we need to be serious about paying back that debt once the problems are behind us.

A 50p tax rate says that we think it is fair and equitable that the very richest help proportionally more than the less affluent.

I very much welcome the Chancellor's comment that once this international crisis is over and the books on their way to balance again the 50p rate could be axed. And so it should be. Taxes should only exist to pay for what we need: they serve a purpose, not a principle.

That said, our fundamental British values should underpin tax policy. I think the quintessential British value of fair play says that the richest - who proportionately have paid less than the poorest for decades - should contribute more to help out when times are tough. And why, with Labour, those on modest or middle incomes - the vast majority of Putney, Roehampton and Southfields residents - won't pay more income tax.