The often-fuzzy line between income from capital and labour means a large gap in relative tax rates breeds tax avoidance.

ECONOMIST: Free exchange: Zero-sum debate | The

Early in 2012, the tax authorities will report how much revenue is actually raised by the top 50% rate of income tax that Mr Osborne inherited from the previous Labour government.

ECONOMIST: The real fight starts for the coalition government

This will help New Labour because these students will not benefit as much from a university education and average national income will not increase as much, keeping more families above the New Labour poverty measure in the future.

ECONOMIST: Letters

Furthermore, household debt has risen under Labour from about 100% of disposable income to a record 140%.

ECONOMIST: Labour could be hurt if interest rates rise this spring

In the past eight years under Labour, the number of income-tax payers has risen from 26.2m to 30.5m.

ECONOMIST: The Conservatives toy with a politically risky idea

He said Labour would reverse the cut in the top rate of income tax from 50p to 45p.

BBC: Battle over plan to cap benefits ahead of Commons vote

But even there an array of reforms, from a stronger currency to an overhaul of subsidies, is needed to boost labour income and encourage consumption.

ECONOMIST: World economy