Energy and Climate Change Secretary Chris Huhne has added to coalition tensions over the future of the 50p top rate of income tax with a warning to Tories against 'helping their friends in the City'.
His comments come as a report from the Institute of Fiscal Studies (IFS) is expected to argue the 50p tax rate for those earning more than £150,000 may not boost Treasury coffers and may even lower revenue.
This is because the wealthy, who provide a huge source of funds for the Chancellor, could reorganise their finances to avoid paying tax.
"It is not clear whether the 50% rate will raise any at all," the IFS report will say, according to the Sunday Times.
"There are numerous ways in which people might reduce their taxable incomes in response to higher tax rates; at some point, increasing tax rates starts to cost money instead of raising it. The question is, where is the point?"
In an interview with Prospect magazine, Huhne signalled his party would block any attempt to scrap the levy on Britain's highest earners if it went before MPs.
"If the cut in the top rate of tax is just a way of helping the Conservatives' friends in the City to put their feet up, then forget it."
"The top priority for tax cuts, if there is spare money, has to be lifting the hard-working low paid out of income tax altogether," he added.
"I have no ideological attachment to a particular tax rate. But if we are to cut the top rate of tax from 50p there has to be a cast-iron economic justification. During tough times, we have to be all in this together.
"I would be astonished if the Treasury review was able to produce a definitive figure for the top tax rate where we start losing revenue, given the number of studies over the years that have come to different results.
"A package that cut the top tax rate but offset any income gains to higher earners by curbing pension relief or applying a high-end property tax would boost incentives more than any other change."
However, Work and Pensions Secretary Iain Duncan Smith insisted the higher rate would eventually be scrapped.
"On the 50p tax rate George Osborne and the Prime Minister both made it clear it was never forever so it is just a matter when they decide that actually it has done whatever it has got to do in terms of getting the deficit down, that was always the position of the government,' he told BBC 1's Andrew Marr Show.
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