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Alistair Darling will call Labour rebels to a series of private meetings today over the 10p tax issue as he begins a week-long operation to spare Labour its most embarrassing Commons defeat since it came to power in 1997.
The Chancellor launched the fightback yesterday by promising that he would seek to compensate low-paid workers made worse off by the abolition of the 10p tax rate.
He insisted that there could be no immediate concessions, however, and said that the current “constrained circumstances” limited what he could do for those on low pay.
The crucial vote is expected to come a week today. Frank Field, the former Welfare Minister, will table an amendment today, requiring the Government to produce an immediate package of compensation.
Criticism of the Government for failing the poor intensified last night after it emerged that energy companies will be allowed to continue charging less well-off customers more. In last month’s Budget Mr Darling promised to force suppliers to reduce tariffs on pre-payment meters after more than 100 Labour MPs signed a Commons motion demanding action.
However, the agenda for a “fuel poverty summit” this Thursday, obtained by The Times, makes it clear that energy companies will be required only to provide more information to pre-payment meter customers on how they can get better deals.
David Orr, chief executive of the National Housing Federation, said: “Educating customers is one thing, but the only way to ensure fairness is to compel the big companies to equalise pre-payment meter tariffs with the standard rate immediately.” Mr Darling denied that the Government was in the middle of a “car crash”, and said he believed it would win any vote on the 10p tax issue, despite some 70 MPs, including six ministerial aides, expressing concern publicly.
There seems little prospect of Labour MPs heeding concerted calls for unity as Charles Clarke, the former Home Secretary, launches a new round of infighting today with an attack on Ed Balls after the Schools Secretary’s interview with The Times last week.
“His injunctions about the ‘indulgent nonsense’ of ‘private briefings against the Labour leader’ certainly come from one who is well acquainted with this kind of activity,” writes Mr Clarke in a letter published today.
“His references to ‘disappointment’ resonate. It’s certainly true that many Labour MPs, including myself, are disappointed by policy decisions such as the abolition of the 10p tax rate, the over-bureaucratic and insensitive nature of the post office closure programme, and the problems arising from lack of preparation for a Northern Rock-style economic challenge. These all stem from Treasury positions with which he is very familiar.”
Gordon Brown has so far refused publicly to accept that the abolition of the 10p rate will leave many low-paid workers, particularly single people and childless couples, worse off.
The measure, introduced by Mr Brown in his last Budget as Chancellor last year, is expected to leave 5.3 million people worse off when it comes into effect this month.
Speaking on The Andrew Marr Show on BBC1, the current Chancellor acknowledged that the Government knew the abolition would lead to some people losing out, but said that it had chosen to help pensioners and those with children as a “first step”.
“Of course you know when you make any changes to the tax what the effects will be,” he said. “I attach considerable importance to making sure that we help people on lower incomes,” he added.
Mr Field said he thought that Labour MPs would be unmoved by Mr Darling’s offer of future action. “The idea that somehow we’ll do something undefined in the future to protect the poorest people in work, just is not on for most Labour backbenchers.”
David Cameron, the Tory leader, said Mr Darling “should get off his backside and start rewriting this Budget to stop targeting 5.3 million of the lowest-paid people in our country.”
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