Gordon Brown today faced a double whammy over the 10p tax rate row, with claims that his concessions are already unravelling on top of the damage to his standing caused by his climbdown.
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Former Labour minister Frank Field, the leader of the Labour tax rebels, warned the Prime Minister and Chancellor Alistair Darling that there must be no backtracking over yesterday’s Government U-turn.
He said that Mr Brown had agreed that the compensation package for groups hit by the abolition of the 10 per cent tax band would be backdated to April 1.
But ministers refused to confirm that all 5.3 million workers - from single childless people to those aged 60-64 - would be compensated. Shadow chancellor George Osborne claimed that the deal was already unravelling less than 24 hours after it was announced in a letter from Mr Darling to all Labour MPs.
Mr Field called for a “clear statement” from the Government that all elements of the package to compensate households hit by the scrapping of the 10p rate would be backdated.
“This is an agreement that the Prime Minister actually put his stamp on. The agreement - there is no mistake about this - will be backdated to April 1.
“This package is now felt to be owned by the House of Commons. The House of Commons is aggrieved that we got ourselves into a position where some of the poorest in work appeared to be punished by these tax changes.
“Nobody wants that to happen,” said the former social security minister.
The potential for further tax trouble is the last thing Mr Brown needs after his drubbing in the Commons yesterday at the hands of David Cameron and Nick Clegg.
The Prime Minister, due in the West Midlands this afternoon to campaign for next week’s local elections, is already besieged by economic problems including record fuel prices, higher food costs and falling house prices.
All that was topped off today by a series of strikes in the public sector led by teachers and civil servants. Mr Brown had repeatedly insisted that he would not bow to the Labour tax rebels, but, facing the prospect of defeat in a crucial Commons vote next Monday, he was forced to back down.
He said last night that he was not being “pushed about” by his own party, insisting: “The fundamental element of the 2007 Budget was abolishing the 10p income tax rate, and that is still going ahead.
“I don’t think I’ve been pushed about at all. What I’ve done is listen and made the right long-term decision.
“When we looked at it in more detail we saw we could do more to help,” he said.
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5 Comments
Funny thing about these new measures to compensate us.
The ones I’ve heard on the news won’t affect me at all, despite my extra £150 a year tax bill from the rise. Many of us won’t qualify for increase in wages because of being on more than minimum wage, won’t qualify for winter fuel payments as too young and won’t get tax credits due to hours worked or wages paid. Yet we remain worse off.
Amusing how the press and MPs suddenly woke up to the increase, a year after it was announced. Like it had just happened.
1 year to realise that something announced in plain view in a budget, not even hidden away in the small print, was going to cause a problem to those who aren’t earning £18K+. About right for both press and MPs.
he’s got to go sooner than later he’s bringing this country to it’s knee’s he’s done more u turns than there are winding roads in wales,useless spineless dopey no leadership and scottish and thats just the nice things about him,everyone must show nu labour enough is wnough at the local elections,lets give then a bloody nose,don’t vote labour.
Of course he could not confirm anything because the measures taken will actually benefit a very very few, in limited target areas which all sounds great in the media, calms down the noisy rebels and makes it look like the Front bench “care”. A repeat of the John Major takeover is being played out for all to see and the EU to laugh at.
It is no use compensating people in six months time. People need the money now to deal with increased heating costs, spiraling petrol prices (the government have even increased the tax on that), and rising food prices. Surely it is easier not to take money off people in the first place than to have to give it them back. Surely it only makes sense to tax people who can afford to pay the tax in the first place.
True, it is easier not to take money off people in the first place.
Maybe he thought giving us over a year’s notice would mean we become used to the idea of a DOUBLING of tax rate.
Still, we survived before there was a 10% rate and we’ll survive after.
Its a kind of sink or swim situation.