Chief Secretary to the Treasury Danny Alexander has dismissed calls to axe the 50p income tax rate for the highest earners as "cloud cuckoo land".

The Liberal Democrat minister admitted the Government was "concerned" about the state of the UK economy following poor growth figures earlier this week.

But he rejected calls to scrap the top tax rate to make the UK more competitive.

Last week Mayor of London Boris Johnson said abolishing the levy on the highest earners, brought in under Labour, would be "a signal that London is open for business".

That was backed by former Chancellor Norman Lamont who said British taxation was "uncompetitive" and "too high compared with other European countries".

In an article for the Sunday Telegraph, he added: "The 50% higher rate of income tax is probably one tax which could be abolished without any effect on revenue."

But Mr Alexander insisted the coalition agreement set out how the Government's "first priority" for any reduction in tax would be aimed at low and middle income earners.

He told BBC1's Andrew Marr Show: "Anyone who thinks we are going to shift our priority to reducing the tax burden for the wealthiest has got another think coming. That cannot be the right priority for a country at this time.

"We are going through very difficult circumstances, we have got real financial pressures on people and we are going to stick to our priority that says tax reductions we can push through will be aimed at those on low and middle incomes."

He added: "The idea that we are going to somehow shift our focus to the wealthiest in the country at a time when everyone is under pressure is just in cloud cuckoo land."

Press Association, photo by Scott Campbell Photography