At a Lansons post-Budget debate, Tory City Circle chairman Spring said the move in last week’s Budget was likely to raise “virtually nothing”.
LibDem Treasury spokesman Lord Oakeshott said the rise was “gesture politics” but was not against it in principle and was not concerned about a drain of talent from the City.
Social Market Foundation director Ian Mulheirn said the Government’s estimate that the measure would raise £2.4bn a year by 2011/12 was “very optimistic”.
Spring said the Government had reached “a sort of death rattle” and he felt huge sympathy for Chancellor Alistair Darling for having inherited the situation.
He said the measures mean the highest rate of taxation, including National Insurance, will now be well over 60 per cent, placing the UK among the highest-taxed countries in the world.
Spring said: “The Budget was extraordinarily political and I think that was at the heart of this 50p tax rate and that was designed to trap us. The priority is those people earning over £20,000 in 2011 who are going to suffer an increase in National Insurance and that is where we would aim any help.”
Lord Oakeshott said: “It is just gesture politics at the last minute. We would be much more in favour of having a really big increase in personal allowances for everybody up to £10,000 so we take several million people out of tax and put spending power into the hands of the people at the bottom of the scale whoare going to spend it. We are in favour of a much tougher clampdown on tax loopholes and tax breaks which I think in this climate is right and fair.”