Tax increase for high earners revealed in Budget

Alistair Darling has forecast that public deficits will reach 12 per cent of GDP this year.

Making his Budget speech to parliament today, the chancellor showed that the government predicted a £175 billion public debt for 2009 and a £173 billion debt for 2010.

Net borrowing levels for the UK were predicted to hit 59 per cent of GDP for 2009, before peaking at 79 per cent in 2013/14.

Government deficits around the world have been expanding as a direct result of the economic downturn, which in turn has its roots in the global credit crunch.

It was also announced in the Budget that Britain’s high earners will face an income tax hike as the government tries to limit its debts.

Those earning £150,000 a year or more will pay 50p in the pound instead of 40p from next April.

This is far more radical than the proposal in last November’s pre-Budget report, which mapped out a new 45p rate from 2011.

Mr Darling blamed the deficits on what he termed an ’extraordinary’ financial crisis and ’the most serious global economic turmoil for over 60 years’.

Responding to the Budget speech, leader of the opposition David Cameron blamed the government for creating a ’decade of debt’ - adding that they had ’failed to fix the roof while the sun was shining’.ADNFCR-2318-ID-19133496-ADNFCR