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Alistair Darling read the last rites over new Labour yesterday by saddling Britain’s highest earners with a new 50 per cent tax rate as he struggled to dent a £1.4 trillion mountain of debt. About 350,000 people who earn more than £150,000 a year face a triple hit of charges. Their top rate of tax will rise from 40 per cent to 50 per cent next April; their personal allowances on which they currently do not pay tax will be wiped out; and their tax relief on pensions will be reduced to 20 per cent. On average they will be £80 a week worse off. A further 750,000 people who earn more than £100,000 will lose their personal allowances and be about £40 a week worse off. The Chancellor’s 51-minute Budget speech was marked by the worst economic figures in peacetime. MPs gasped as he reeled off a list of eyewatering numbers, most shockingly that Britain’s debt will amount to 79 per cent of GDP in 2013-14, at £1.4 trillion, and that borrowing over the next two years will total £348 billion, and £703 billion over five years. The plunge into the red comes as tax revenues tumble. Two or three general elections may have passed before the finances are back in balance. Even yesterday’s figures were based on a gamble. Mr Darling forecast that although the economy will contract by 3.5 per cent this year – far worse than expected – it will start growing again towards the end of the year, expand by 1.25 per cent next year, and rise to 3.5 per cent in 2011. The predictions were dismissed as overoptimistic by the City and dishonest by the Conservatives. Within minutes of Mr Darling sitting down the International Monetary Fund had issued contradictory forecasts that the economy would be worse this year (a contraction of 4.1 per cent) and that the slump would continue into next year (minus 0.4 per cent). Its consolation for Britain was that Germany, with a 5.6 per cent slump, and the eurozone, with a drop of 4.2 per cent, would do worse. Mr Darling predicted that borrowing would be halved within four years but added that deflation would hit minus 3 per cent by September. David Cameron said that any claim that Labour had to economic competence was “dead, over, finished”. The richest 2 per cent of the working population will bear the brunt of measures, which included a fiercer than expected assault on public spending, designed to show that somehow over eight years – two years longer than expected – Britain’s finances might get back on course. The income tax rises will come in at the start of next year’s general election campaign, assuming that Gordon Brown goes to the country on May 6, local elections day. For three elections Labour’s flagship manifesto pledge has been not to raise the basic or top rates of tax. Mr Darling has broken it because he felt that it was right for the better-off to shoulder the burden, but Labour’s claim to be the party of aspiration will suffer. Yvette Cooper, the Treasury Chief Secretary, said it was the right response to “exceptional circumstances”. The 50 per cent rate replaces the 45 per cent level announced in November’s PreBudget Report and will come in a year earlier than planned. Spotting an obvious trap, the Tories will not commit to reversing it but will instead try to avoid implementing the 0.5 per cent rise in national insurance still in pipeline from the PreBudget Report at the end of last year. The tax rises were clea