28/01/2014 08:28 GMT | Updated 28/01/2014 10:59 GMT

George Osborne Refuses To Rule Out Further Tax Cut For The Rich

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LONDON, ENGLAND - JANUARY 15: Chancellor of the Exchequer George Osborne speaks on EU reform in central London on January 15, 2014 in London, England. Mr Osborne delivered a warning to Britain's European partners that it should undergo reform, halting decline by backing business and curbing welfare spending if the UK is to remain a part of Europe. (Photo by Dan Kitwood/Getty Images)

George Osborne has refused to rule out a further tax cut for the rich, after Labour said it would increase the tax paid on earnings over £150,000.

On Saturday Ed Balls revealed he would increase the top rate of tax from 45p to 50p should Labour win the next election. The pledge drew criticism from The Tories and some businessmen - but proved popular with voters.

In combative exchanges in the Commons on Tuesday, Balls demanded Osborne use the opportunity to rule out a promise to lower the rate from 45p to 40p after 2015.

"He's delivered one massive tax cut for the richest 1% earning over £150,00 when everybody else is worse off," Balls said. "Why won't he stand up at this Despatch Box now and rule out another top rate tax cut form the Conservatives in the next parliament, come on George , stand up and rule it out."

However the chancellor, who had earlier told MPs he was a "a low tax Conservative", avoided the question. Instead he attacked Balls' tax announcement as the most "disastrous policy launch in the history of the modern Labour Party".

"On the day that we learn our economy continues to grow, isn't it clear the anti-business Labour Party is now the biggest risk to the economic recovery," he said.

Boris Johnson urged the government to consider cutting the top rate of tax to 40p. Yesterday David Cameron also refused to be drawn on the issue. Questioned about the proposal, the prime minister said only that tax rates were a matter for Osborne.

Ed Miliband has insisted restoring the 50p top rate of income tax is "utterly fair" when the rest of the country is facing a squeeze on living standards.

"It will help get the deficit down and reflects the principle of the British people: that those who have the broadest shoulders should bear the greatest burden," he said.

SEE ALSO: Osborne Accuses Labour And Balls Of Being 'Anti-British'