Hain drops tax rise comments

Peter Hain said he awoke to a "feeding frenzy"

Commons leader Peter Hain gave a re-worked speech on Friday, denying any suggestion of raising the top rate of tax.

He had planned to suggest that higher earners should pay more tax but omitted the reference after a rebuke from the prime minister.

Speaking to an audience in Cardiff, Mr Hain said "Let me make clear... we will not raise the top rate of tax and there is no going back to the old days of punitive tax rates to fund reckless spending".

Earlier however, he had spoken of there being "hard choices" on tax ahead and mooted the possibility of high earners having to cough up more.

'Chancellor's decision'

This sparked a stinging rebuke direct from Tony Blair, attending the EU summit in Greece, categorically denying there was any question of changing the government's tax policy.

The Treasury also reacted angrily, saying it was up to Chancellor Gordon Brown to make decisions on taxation.

In an interview on the BBC's Today programme, Mr Hain said too many people on average incomes - including teachers and police officers - now fall into the 40% income tax band.

He said in order to help those on low and middle incomes the top earners could be asked to give more.

Profile: Peter Hain

But speaking delivering the Aneurin Bevan lecture, on Friday evening, he said a lot of what had been reported earlier in the day was "news to me".

It smacked of an "obsession with splits and process" he said, rather than concentrating on substance.

He said the government was not planning to go back to "the old days" of high taxes.

"We will not be raising the top rate of tax," he said.

Instead he said, he had simply wanted to ask "hard questions on the issue".

Earlier, Mr Hain's expected comments drew fierce criticism from opposition parties.

They want to tax more, they want to spend more and I am afraid they will fail more

Michael Howard

Have your say: Should high earners pay more tax?

Shadow chancellor Michael Howard saying it represented "the slipping of the last of the veils from New Labour".

He said Labour had failed to learn the lessons from the 1970s and warned that high earners would leave the UK if taxes were raised.

Mr Howard told the Today programme: "They want to tax more, they want to spend more and I am afraid they will fail more."

Tory leader Iain Duncan Smith said it was a case of a split between Mr Blair and his "surrogate" Peter Hain and Gordon Brown's supporters.

But Mr Hain won praise from the former leader of the House Robin Cook.

He said Mr Hain was an "immense asset" to the Cabinet because he said things that might be difficult.

He told BBC Radio 4's Any Questions people were doing "immense damage to politics by insisting on too tight party discipline".

He said one of the big reasons people were turning off politics was because they do not see enough politicians "thinking for themselves, saying original things and speaking from the heart and from conviction."

He said he did not agree with Mr Hain on the tax issue but people should be allowed to murmur in public what they were thinking.