Tories squabble over top tax rate as Labour shows signs of recovery

David Cameron was fighting to contain a potentially damaging row over his party's tax policy yesterday as a new poll showed the Tory lead over Labour has narrowed.

The ComRes poll for The Independent on Sunday showed the Conservatives are on 41 per cent, still 11 points clear of the Government, but down from a 16-point lead a month ago.

Labour's share increased by five points to 30 per cent, in a sign that Gordon Brown's position could be stabilising after months of being punished for the economic downturn.

The poll was published as the London Mayor, Boris Johnson, appeared to clash with the Shadow Chancellor, George Osborne, over the Tories' plans to commit to the Government's 45p tax rate if they win power.

Mr Osborne described matching the plan to raise the top rate of tax to 45p on earners over £150,000 in 2011 as "difficult to avoid" because of the desperate state of public finances the Tories are anticipating if they win the election.

On Thursday Mr Cameron said the rich would have to pay their "fair share" to rescue Britain from recession. But Mr Johnson warned that "clobbering the rich" would punish the very people in the City who could stimulate the economy again after the recession.

The mayor told Radio 4's Any Questions?: "It sends out a signal to people who create wealth, people who are energetic... can generate new industries or drive large enterprises of one kind or another ... that we want to take more of their proceeds away than before. It is a deterrent to enterprise."

While the 11-point Tory lead remains healthy, the drop from 16 points will create jitters among senior ranks at a time when the delicate issue of tax is thrust to the top of the party's agenda.

The party is also suffering renewed criticism over its plans to withdraw from the EPP grouping in the European Parliament.

Tory sources insisted there was no difference between the position of the Tory leader, Mr Osborne, and Mr Johnson's remarks. But Labour seized on the apparent split as a sign that the party was in disarray over tax.

The Shadow Chancellor yesterday refused to bow to criticism from Tory grass roots, insisting that he had never ruled out tax rises under a Conservative government.

He told the Today programme: "If you look at the proposal to increase the rate of tax on people earning over £150,000 to the new 45 per cent rate, that's going to be difficult to avoid."

The ComRes poll showed signs that people are beginning to see an end to the gloom of the recession, despite unemployment tipping the two-million mark last week.

Nearly 40 per cent of people expect the economy to start to show signs of improvement soon, while 58 per cent disagree. Some 48 per cent agree that "David Cameron has what it takes to be a good prime minister", an increase of 2 per cent from a year ago, while 41 per cent disagree.

Despite the growing belief that environmentalism is becoming a victim of the recession, 83 per cent of people said they were "ready to make significant changes to the way I live to help prevent global warming or climate change", a figure which has increased by two points from two years ago.

The Liberal Democrats are down five points on 17 per cent, while the Tories remain unchanged on 41.

Labour MP Anne Snelgrove said: "George Osborne hasn't got a grip on the Conservatives' tax and spend policies. Until he comes clean on exactly where he wants to cut public services, George Osborne's tax plans will be mired in confusion."