Alistair Darling's Budget assault on the wealthiest workers could ultimately divert earnings out of the UK economy, commentators warned last night.

Alistair Darling's Budget assault on the wealthiest workers could ultimately divert earnings out of the UK economy, commentators warned last night.

The Chancellor yesterday delivered a three-pronged attack on those who earn the most in an attempt to cover some of the £175bn borrowed by the UK to prop up the ailing economy.

Controversially, he raised the rate of income tax for those who earned over £150,000 to 50p in the pound, up from the current 40p rate. It was a move laid out in November's pre-Budget report, so not entirely unexpected, but it is a measure that will be brought in a year earlier than predicted, from April 2010.

He also announced an end to tax breaks on pension payments for those who earn more than £150,000 a year and, in a further tightening of the screw, said that the income tax personal allowance for those on salaries of more than £100,000 a year would be gradually reduced.

The government yesterday admitted that the arrival of a new 50% tax rate broke one of Labour's 2005 General Election pledges but defended it as a necessary move in "exceptional times."

However, Sean Drury, international mobility partner at PricewaterhouseCoopers, said that the move could unwittingly draw the best talent, and highest earnings out of the country.

He said: "This increased tax take could accelerate the movement of high earners and top performers in industries like finance and technology to other established and growing economic hubs.

"Countries like Switzerland will look increasingly attractive to some of the people in the key industries needed to lead the UK out of the recession."

He added: "Companies relying on expatriates earning over £150,000 in the UK will face significantly increased employment costs - they will now pay £1 in tax for every £1 spent on providing essential benefits, such as housing and cost-of-living allowances."

"This is an unwelcome challenge to competing effectively.

"From next April, a year earlier than expected, the UK will rank 18th among the G20 economies in terms of income tax and social security rates for senior executives, based on current rates."

Stuart Fraser, policy chairman of the City of London Corporation, added the new higher rate could put the Square Mile at a disadvantage compared with financial centres overseas.

Mr Fraser said: "The new top rate of income tax at 50% may damage the City's competitiveness - we operate in a global market for talent, and that talent is expensive."

However, independent financial advisor Douglas Baillie Snr, a Perth-based specialist with 35 years service, agreed that the higher tax bracket was necessary for now. "I think it is understandable," he said. "There have been too many people in high-profile jobs getting paid too much and ordinary workers have started to feel uncomfortable about that. Recovery through taxation is inevitable."

However, Mr Baillie, a pensions expert, attacked the government for penalising those high earners who are paying into a pension plan. Mr Darling yesterday announced that the 40% tax relief for the highest contributors would be scaled back to the 20% rate enjoyed by most savers.

Mr Baillie suggested that the highest earners would "divert" their funds out of the UK in response to the tighter taxation. "I think it is wrong to penalise people who are trying to make themselves independent from the state.

"This is another raid on pension funds. Pension funds represent a significant part of investments that go into our economy. For Alistair Darling to dis-incentivise higher earners to put money into our economy could lead them to divert their money into other areas, such as offshore funds. The highest earners tend to have access to high-quality advice."