Govt survives 10p tax vote

Frank Field
Frank Field

By Liz Stephens

Gordon Brown has survived a Labour revolt over his 2007 decision to scrap the 10p bottom rate of income tax today.

A group of Labour MPs had threatened to block the entire Budget through the vote but the government won through by a comfortable margin of 43 votes.

The Labour rebels, led by Frank Field and Greg Pope, had the backing of both the Conservatives and the Liberal Democrats.

The rebels hoped to pass amendments to the finance bill, which receives its remaining stages today, that will ensure no person would be worse off before the Commons granted the government powers to continue levying income tax.

In total 44 MPs from across the Commons had signed Mr Field's amendment.

It required that action should not be taken until "measures have been taken to ensure that no person is worse off by reason of the person's income not being sufficient to secure that the effect of the abolition of the 10p starting rate has not been entirely offset by the reduction of the basic rate".
The rebels believe at least 1.3 million people are worse off by more than £1 a week since the 10p tax was scrapped.

Downing Street said the government was "making its case" for the status quo, and pressed the need for tax credits and measures laid out in the 2008 Pre-Budget Report to be taken into consideration.

A spokesman for the prime minister said: "We have set out the best and most affordable ways to provide support for lower-and middle-income households".
However, Lib Dem Treasury spokesman Vince Cable said those on very low incomes were paying too much.

"This is a situation that Gordon Brown has made even worse, despite the temporary measures he brought in to try to fix a problem of his own making," he said.
The decision to abolish the ten per cent starter rate of income tax was included in Gordon Brown's final Budget as chancellor.
It came into force last year along with a reduction in the basic rate of tax from 22 per cent to 20 per cent.
Brown stalled an earlier revolt last year by promising compensation for those who lost out to the scrapping of the lowest tax band, including larger personal tax allowances.


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