Labour will reverse the Tory decision to cut tax for Britain's wealthiest, by re-introducing the 50p top rate of tax, Ed Balls has pledged.
The shadow chancellor said he would reverse the decision taken by the coalition to reduce the amount levied on Britain's highest earners - those on more than £150,000 - so he could help reduce the deficit.
Balls told the annual Fabian Society conference in central London this morning that "those with the broadest shoulders" should bear a "fairer share of the burden".
Balls said: "The latest figures show that those earning over £150,000 paid almost £10 billion more in tax in the three years when the 50p top rate of tax was in place than when the government conducted its assessment of the tax back in 2012.
"When the deficit is still high, when tough times are now set to last well into the next parliament, when for ordinary families their real incomes are falling and taxes have risen, it cannot be right for David Cameron and George Osborne to have chosen to give the richest people in the country a huge tax cut."
Balls continued: "That's why, for the next parliament, the next Labour government will reverse this government's top rate tax cut so we can finish the job of getting the deficit down and do it fairly.
"For the next parliament, we will restore the 50p top rate of tax for those earning over £150,000.
"Reversing this unfair tax cut for the richest one per cent of people in the country. And cutting the deficit in a fairer way."
The announcement has gone down like a lead balloon in the City.
Katja Hall, Confederation of British Industry's chief policy director, said: "Getting the UK's deficit and national debt down is essential to maintaining the country's credibility with the markets and for the long-term health of our economy. We've been clear that this must go hand in hand with pro-business, pro-growth policies.
"We don't believe that introducing a 50p income tax rate is the right way to raise the money because this puts talented people off coming to the UK to invest and create jobs."
Simon Walker, director general of the Institute of Directors, said: "If the Labour Party wants to be taken seriously by business - and especially by international companies which may invest or expand in the UK - it needs to drop its practice of knee-jerk reversion to the old Socialist nostrums that so damaged Britain's economy in the past.
"It will significantly damage Labour's credibility with the business community.
"The 50p tax rate - actually 52p, because the last Labour Government manipulated national insurance contributions - greatly damaged Britain's claim to being seen as a low-tax economy and actually drove down total tax receipts.
"It was, and remains, an envy-driven political gesture designed solely to drive a wedge between voters.
"The Institute for Fiscal Studies warned when it was introduced that it could fail to boost total revenues. HMRC's own analysis reported that the underlying yield 'is much lower than originally forecast...and it is quite possible it could be negative'.
"As a tax it was self-defeating: it failed to raise enough money to pay for itself.
"It is deeply disappointing to see Ed Balls, who was much respected as City minister, pandering to the troglodyte elements in his own party.
"In 1997 the Labour Party won credibility, and an election, when it pledged not to raise income taxes on the wealth-generators on whom all public spending depends. Frankly, the businesses of Britain expected better."
Mark Littlewood, director general at the Institute of Economic Affairs, said: "Reintroducing the 50p top rate of income tax would be a disaster for both enterprise and economic growth.
"As the UK's economy finally begins to grow, it's absurd that the Shadow Chancellor has announced a policy that would jeopardise the fragile recovery.
"Evidence has proven that a 50p rate raises trivial amounts of money and its long-term effects mean it
may, in fact, raise no money at all.
"Those earning over £150,000 pay nearly 30% of all income tax and often create jobs, so we should be nurturing, not eroding, this tax base.
"The Shadow Chancellor need only look across the Channel to France to see the damage punitive levels of income tax can reap on the wider economy.
"Ed Balls should be signalling that the UK is open for business. Instead, he has announced a policy that will disincentivise investment and job creation.
"Politicians should match their pro-business rhetoric by reducing the top rate further, rather than engaging in political posturing."
Jonathan Isaby, chief executive of the TaxPayers' Alliance said: "Reintroducing the 50p rate would be an unmitigated disaster for Britain.
"It flies in the face of the evidence, which shows that cutting the top rate has brought in more cash to treasury coffers and boosted the economy.
"Ed Balls has rightly identified the need to balance the books, but the best way to do that is to cut spending, not hike taxes."