Media playback is unsupported on your device Media caption Ed Balls: "This is not an anti-business agenda ... it's an anti business as usual agenda"

Ed Balls has rejected claims that Labour's pledge to bring back the 50p top rate of income tax is part of an "anti-business agenda" in the party.

The shadow chancellor said it was a "fair" measure to be used while Labour reduced the "huge" deficit it would inherit if it won the 2015 election.

While those earning more than £150,000 should pay more, he told the BBC he wanted to see overall taxes falling.

Foreign Secretary William Hague said it sent "the wrong signal" about Britain.

And some business leaders have echoed that warning.

Ed Balls is sending the signal that a future Labour government will go back to high taxing, high spending and high borrowing William Hague, Foreign Secretary

'Political signal'

The previous Labour government created a new 50% tax band in 2010 for anyone with income of more than £150,000, but the coalition cut it to 45% last April.

Media playback is unsupported on your device Media caption Lord Jones says a return to the 50p rate of tax is "lousy economics"

Mr Balls told the BBC's Andrew Marr show that this had been "foolish" and had "fed resentment" at a time of deep austerity.

He suggested the 50p rate would only be in place while Labour cleared the budget deficit, which it aims to do by 2020. He also ruled out raising it further.

"What we are talking about is going to 50p while we get the deficit down," he said.

"It is a fair way to get the deficit down. The phrase is 'we are all in it together' - that is part of the policy."

Critics of Labour have claimed the move is part of a growing pattern of anti-business rhetoric, following Ed Miliband's pledge to freeze energy prices for 20 months and to set a limit on the size of high street banks.

Image copyright Reuters Image caption Labour has said it will take a firm approach to banking reform

But Mr Balls insisted he was "pro-business" and had a track record of supporting an "open, dynamic, wealth-creating, entrepreneurial economy".

However, he said the coalition had failed to get to grips with the deficit and Labour would take a different approach to reforming the big banking and energy markets.

"This is not an anti-business agenda, it is an anti-business as usual agenda."

TOP RATE OF INCOME TAX 1979-1988: 60%

1988-2010: 40%

April 2010-April 2013: 50%

April 2013-present: 45% Q&A: Return of the 50p tax rate?

He added: "It is absolutely not back to the 1980s and 1990s. The reality is we are in very difficult circumstances and because of George Osborne's failure in the last few years these difficult circumstances will last well until into the next Parliament."

Reinstating the 50p top rate would raise a "substantial" amount of money, he added, although ministers have disputed this - saying a 2012 analysis estimated the switch to 45p reduced tax revenue by about £100m.

Alistair Darling, the Labour chancellor who introduced the 50p rate, backed its return, saying "people with the broadest shoulders carry their fair share of the burden".

But Lord Digby Jones, a trade minister in the last government and a regular critic of Ed Miliband, said it was "lousy economics" and Labour's approach seemed to have become "if it creates wealth let's kick it".

'Predatory'

For the Conservatives, Mr Hague said raising income tax was the wrong message to give when the UK was seeing its economic fortunes improve and was "an anti-business, anti-job creation agenda".

"The long-term economic plan of this government is working," he told Andrew Marr.

"Ed Balls is sending the signal that if there is a Labour government we will go back to high taxing, high spending and high borrowing."

Business have roundly criticised Labour's plans, with former Marks and Spencer boss Stuart Rose claiming the 50p rate "bordered on predatory taxation".

Xavier Rolet, chief executive of the London Stock Exchange Group, told the BBC such a move could deter future entrepreneurs from coming to the UK.

"I think there will be an impact. I think fiscal policy sends a powerful message and has a powerful impact on investment decisions."

A YouGov opinion poll after the 2012 Budget - in which Mr Osborne announced the switch to 45p top income tax rate - suggested 55% of people wanted to keep the 50p rate although more than 60% of Conservative voters backed lowering it.

A snap poll taken by Survation on Sunday found 60% were in favour of re-instating the 50p rate, with 17% opposed.