Philip Webster, Political Editor, Sam Coates and Greg Hurst
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Gordon Brown told Labour MPs that he understood their concerns over the abolition of the 10p tax rate last night as he tried to head off a dangerous rebellion before the local elections next week.
In what MPs and ministers called a confident performance Mr Brown told the Parliamentary Labour Party (PLP): “I get it”, after three weeks of complaints that he had failed to appreciate the scale of anger among their constituents over the impact of a change made in his Budget last year.
Mr Brown told his MPs: “I understand how difficult it is out there. I understand that people out there are fighting the elections and questions are being asked. With food prices rising, fuel prices rising, people want to know that we do get it, that we understand what is happening to them.”
But he added: “We cannot have the Budget defeated. Issues have come up in the past. We have dealt with those. We have a responsibility to listen, to hear and to understand what has been said. But there is a responsbility on all of us to unite. We have to listen [but] we have to unite.”
The 10p issue was raised with him at a PLP meeting three weeks ago, when Mr Brown angered his colleagues by suggesting that losers from the move were compensated by other changes.
Mr Brown appeared after last night’s meeting to have bought time in his efforts to prevent a defeat only days before London and local councils go to the polls. He promised to work with Alistair Darling, the Chancellor, to meet the problems in time for next autumn’s Pre-Budget Report.
His words marked a change of tone from a few weeks ago when he insisted that there would be no losers. The Times has been told that Mr Brown called on Labour chiefs to show him payslips that proved that people had lost out at a meeting of Labour’s national executive on March 20.
Then Mr Brown rejected the assertion that anyone would lose out, saying that tax credits had made the 10p band redundant, and that pensioners would be compensated by higher thresholds, the 2p cut in the basic rate and extra winter fuel allowances.
According to an account by Ann Black, an NEC member who represents constituency parties, the Prime Minister said that “no one would be worse off”, and added that he “challenged people to send him payslips which showed otherwise”. A second person present at the meeting has confirmed this account to The Times.
Last night ministers said that Mr Brown had gone a long way to heading off a revolt when the Finance Bill is debated in detail on Monday. But it was unclear how many of the 70 potential rebels would back off.
MPs had been offered a fresh concession earlier when Yvette Cooper, Chief Secretary to the the Treasury, announced that an existing Treasury review into into combating child poverty will be extended to include low income households without children. This is one of the main groups affected by the abolition of the 10p rate.
Then John McFall, the chairman of the Treasury committee, suggested a swift inquiry, reporting by the summer, into how the losers could be helped. This is also likely to be accepted by the Government.
One MP emerging from last night’s meeting said there had been a “complete transformation” in Mr Brown since the unhappy gathering three weeks ago. Another said: “It was a more human, nicer Gordon tonight. He is going to sort it.”
However, that Mr Brown felt the need to attend a meeting he would normally only address once every few months was evidence of the crisis into which the party has been thrown by the 10p affair.
The original inquiry was announced in last year’s Budget and is due to report by the Pre-Budget Report this autumn. Moving the second reading of the Finance Bill, which implements the Budget, Ms Cooper said that the majority of households were better off or the same owing to the “major reforms” in the Budget, but acknowledged that some were paying more.
“It is hard in any one Budget to help everyone and those who lose in any one year may have benefited in previous years, or may also benefit in the next,” she told MPs. “On average those who pay more this year are still around £500 a year better off than they would have been in the 1997 personal tax and benefits system that the Conservatives left us with.”
Some 70 Labour backbenchers and half a dozen ministerial aides have voiced concern over the changes. The former Welfare Minister Frank Field, who has been leading the mutiny, challenged Ms Cooper to bring forward specific proposals to ensure that those on the lowest pay who work “are not made worse off by a Labour Budget”.
Ms Cooper told him: “The Chancellor has said it is his intention to return to this issue in future Budgets and the Pre-Budget Report. He does want to look more at what we can do for those on the lowest incomes, just as we have done in previous budgets.”
She continued: “We will be consulting with stakeholders, with MPs, and with different groups on the next phase to tackle poverty and unfair inequality in Britain.”
The 10p band was formally scrapped this month, but the Finance Bill provides a focus for a rebellion.
The change means that low-earners who would have paid income tax at the lowest, introductory 10 per cent rate will now have to pay the 20 per cent rate. The basic rate of income tax has been lowered from 22p to 20p.
Speaking outside the Commons earlier, David Cameron, the Tory leader, said that 5.3 million people had lost £700 million and offered to work with the Government to compensate them.The Shadow Treasury Chief Secretary, Philip Hammond, called the move to scrap the 10p tax rate “morally abhorrent”.
The scenarios
Worst case Government loses key amendment on Finance Bill next week. Catastrophic losses in local elections. Brown resigns as he sees it as a loss of confidence in his leadership.
Likelihood 1 out of 10
Best case Brown sees off rebellion without further concessions, turns argument on to Tory opportunism
Likelihood 4 out of 10
Middling Brown is pushed all week to make further concessions. Comes up with more next Monday so that party can put up united front in local and mayoral elections. Avoids Commons defeat.
Likelihood 8 out of 10
The losers Childless single people who do not qualify for the working tax credit; childless couples who lose twice from the income tax changes, but gain at most once from the working tax credit; the early retired, too young to benefit from the increase in tax allowance for those over 65

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so at last a goverment that listens or does it? When the political dust has died down i'd be prepared to bet that the majority who lost out with the scrapping of the 10p tax band are still losing out. Five times i've voted labour i will not be doing in the next election.
steve, High Peak, U.K
Science and surgery have combined to give blind people sight; I wonder when it will combine to providine politicians with something resembling a brain? Even a rudimentary one would help.
Richard Crow, Warsaw, Poland
Well if the MPs cannot change Brown's mind, we the voters will have to do it for him at the forthcoming local elections.
Karen Wright, Wallasey, UK
Vote Brown and his government out now. Not content with leading us into an illegal war, he now expects us to pay for it by stealing from the poor and giving to the rich - just like a backwards Robin Hood. My generation will remember this for a long time in future elections.
Chris, Long Eaton, UK
"Gordon Brown tries to buy off the 10p tax rebels".
But will he "buy off " the electorate by May 1st.?
Elizabeth Philips, Halifax, UK
This government has sleep walked thier way into this situation.
Why did the FSA not resist the way banks were encouraging to people to get into debt?, and by relaxing the criteria on lending for mortgages has allowed house prices to escalate to the point that they cannot be sustainable. Prudence?
Paul Cohen, Wokingham, Berks
Gordon Brown, Alistair Darling and Yvette Cooper bleat on about how people are 'unaffected'. Lies and incompetence.
Then when they realise the error they prevaricate to delay fixing it.
Churchill required "Action this day".
My generation will remember this at the polls.
Ian, Bath, UK
So,Brown "understands" and "no one is worse off" - Well, Gordon, my wife is a part time teacher and full time mother, and we are not eligible for tax credits. Her tax doubles...
As you don't count our family as people in the New Labour scheme of things, losing our vote is not a problem then...
Peter, London,
Frank Field to be PM.
SH, Leeds,
These New Labour 'rebels' will not rebel. They voted for the budget. They did as they were told then and they will do as they are told now. Most of these MPs are spineless. They didn't care about the low paid a year ago. They are only concerned now because of the local elections.
Peter, Brixham, Devon
"Mr Brown called on Labour chiefs to show him payslips that proved that people had lost out at a meeting of Labourâs national executive on March 20. "
God help us all.
Bernie, Suffolk, UK
What is he offering these recalcitrant Nulab MPs. The right to vote themselves an even larger increase in pay an expenses next year? Or will it be super jobs at EU level?
M. Cawdery, Portadown, Co. UK, EU.
The pickpocket Brown does not get it, neither does he care. The type of people adversely affected are not anywhere on his priority list. Once the local elections are over, the matter will be shelved and forgotten. Unless that is?? they get a real drubbing at the locals, come on, kick these corrupt self serving liars out.
john, lincoln,
It isn't the rebels in his own party that Mr Brown should be concerned about, it is the millions of voters who are looking for a change in government that he should be worried about.
Is he buying them off with the savings from his poverty inducing tax scheme? Or is he asking the Bank of England for help, one wonders...?
Jennifer Hynes, Plymouth, England
Yvette Cooper Balls (up) Not fit for purpose coining the phrase.
Where do these people come from ? Referring to past figures is totally irrelevant. Those that are losing out want it fixed now, not in some future spin.
What does she care !!! Between both the Balls, they have a nice filled trough claiming enough expenses to cover several low workers salary
Alec, West London,
I will be hit by this tax and I have absolutely no doubt that over the next few days/weeks/months/years we will be promised the earth but nothing will happen. Most of the Labour M.P.'s will do as they are told and let the rest of the Country down. The Tories have been a weak opposition and should be ashamed of themselves. This Country urgently needs a straight talking politicain who actually does as he/she says. I am sick of the lot of them.
By the way, with Gordon giving away millions all over the world and wasting billions on the domestic front overseas charities will see a dramatic drop in money given by the public in this Country.
Roger, Surrey,
I cannot believe that Gordon Brown had to see pay-slips in order to work out that some low-paid people will be paying more tax this year. Single people, whether young or old, do not appear on his radar. They are like milch cows - subsidising everyone else. Has anyone checked whether all the money thrown at 'poor families' actually does lift children out of poverty? Might there not be at least a suspicion that this money is used in some cases simply for the pleasures of the parents?
Alice, Doncaster, UK
Mmmuddling Brown more like. It was his 10% plan , hidden in the small print for political reasons.
However, this distracts from the real issue of diversion of taxes from middle England to Labour voters always looking to preserve his job before the good of the country.
Hammer him in the elections!
Clive Kitchener, Pulborough, Sussex
Can we swap Gordon Brown for Alex Salmond?
Tony Jones, Nottingham, England
So now he 'gets it'
Excuse me but what else 'didn't he get' during his 10 years as Chancellor. We are yet to reap the full whirlwind of his staggering incompetance - and that goes for his ex boss as well.
R C B, Peterborough, Cambs UK
Adding up the "likelihoods", the three options total 13 out of 10! Maybe The Times should produce the next budget!
Chris, Northampton, England
Kayvon Alexander, Sydney,
£500 in ten years? Oh how grateful we should all be!! Make the comparison with people earning £18,000 and it soon becomes apparent what a YAWNING CHASM between workers Labour has created. They HAVE to go. Remember May 1st is your first opportunity to show Mr Brown and co. what you think of his £500 in ten years. Then lick your lips in anticipation of 2010.....if they manage to get there.
judy, Liverpool, England
So Gordon Brown is now saying 'they 'understand.
What does 'he' understand?
That his P45 is on it's way!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
barbara, norht east,
Firstly, I think it is about time this "government" start taking responsibility for their own shortfalls, after all they have been in power for some 11yrs, stop blaming the Conservatives!
Secondly, I agree with comments read here. Gordon Brown should be less hasty in delivering our cash to other parts of the globe, given the so called crunch, shouldn't he use OUR money to help us first?! It is not unfair to ask.
Thirdly, I can also see Labour MP's remaining weak, and forgiving their "leader" at the eleventh hour. Have some backbone, stand up those of us who stand to lose! It is not fair to expect a huge proportion of the country pay, and wait a year while Labour dither and delay in compensating us. We need action now... so stop the Bill now!
Even as a Conservative, I have to concede that I too would like to see Vince Cable as chancellor. He is the only man with straightforward answers and decisions.
Joseph, Nottingham, UK
Richard of Lancaster suggests we should bring down the tax credit system by overloading it with false applications. That's silly, Richard. Surely you realise that the effect on the system would hurt genuine tax credit applicants much more than Gordon Brown!!
Ian, Watford, Herts
No Gordon, you don't 'get it' - not yet anyway. But you will start to get it after 1 May and will totally understand a year or so after that.
11 years of NuLabour; money squandered on gimmicky projects with very little to show for it, and now the low-paid are hit with a tax rise so that the better off can benefit from a tax reduction. And you're PROUD of it!
Donna Walker, Effingham, Surrey
Gorden Brown is a good prime minister ! but not for this country ! It realy delights him to give away billions of our money to other countrys, he just can not see that millions of people in this country are struggling and most of theses are his ( or were his core supporters )
c hooks, lincolnshire,
The 5.3 million losers should all apply for working tax credits regardless of whether they would qualify or not. This would surely give Gordon more to think about than bullying a few MP's back to the party line. It would no doubt bring about a complete meltdown of the wtc system that he is so eager to promote given the track record of total incompetance of said department in their ability to handle existing claimants let alone 5.3M additional requests.
Richard, Lancaster, UK
Gordon had no problem appearing on American Idol smirking as he gave away $200 million of our money. Strange how he can't find £700 million for the 5.2 million low paid workers who've lost out. What about the £800 million he gave India on his last visit, where did that come from ?
Robert, Luton,
I spent my working life as a Tax Inspector and as a professional advisor on taxes for a big accounting firm. Now I own a small business with several employees on lowish wages. I've seen the tax system from all sides. This government got it totally wrong from the start and are now backtracking like mad. You will get all kinds of misleading rubbish from the Treasury (mainly Yvette Cooper) over the next few weeks to say this has been dealt with. It will not be - but do not be surprised if you get a headline concession this week which promises much and delivers little. DO NOT BELIEVE IT. However my prediction is that sufficient Labour MPs will buy it - they are terminally thick but no worse than than any other party's MPs on tax matters - so the Government will squeak by yet again. Am I alone in being an smart knowledgeable person who can see through a hopeless argument or has the entire UK population been lobotomised.
PS Vince Cable should be Chancellor
Roger S, Esher, UK
"âOn average those who pay more this year are still around £500 a year better off than they would have been in the 1997 .....system that the Conservatives left us with.â Yvette Cooper. Is this the best they can come up with, comparing the tax system to how it was 11 years ago. I mean come on.
Kayvon Alexander, Sydney,
Your list of "The losers" has omitted a small group of people: Gordon Brown and his Government. They're going to lose their jobs at the next election, or preferably much sooner.
Likelihood: 10 out of 10.
RW, UK,