Philip Webster and Philippe Naughton
We've made some changes
to The Sunday Times
Ministers struggling to stave off defeat over the abolition of the 10p tax rate have been thrown a possible lifeline by an influential committee of MPs.
The Labour-led Treasury committee announced this afternoon that it is holding an inquiry into the impact of Budget measures on low-income households, particularly the effect of the 10p measure.
Importantly, it said it would finalise its conclusions before the report stage of the Finance Bill in the Commons, probably in June.
That means that MPs trying to avoid voting against the Government next Monday on Frank Field's 10p amendment have an excuse to wait. And it means ministers can say that they will take into account the Treasury committee report when drawing up measures for the pre Budget report.
But while getting the Government out of short-term embarrassment over next week's vote, the inquiry could pose a medium term problem. If it does indeed find that more than 5 million have lost out and proposes a series of measures to put it right then Alistair Darling could be put on the spot again.
He insists that the money is not available now to undo the Budget, and officials are saying nothing can be done until the autumn. Even so, it is unlikely that the committee would not have launched the inquiry without ascertaining informally whether it would be regarded in the Treasury as a possible route out of difficulties
The possible reprieve came as it emerged that 39 Labour MPs have already signed a rebel motion, tabled late last night, which challenges Gordon Brown's decision to scrap the 10p rate of income tax, setting the stage for what could still be a spectacular Commons showdown.
Given that Mr Brown has a majority of just 67, the rebels would have the numbers to deal him a damaging defeat.
The rebellion is being led by Frank Field, the former Welfare Minister. Other former ministers to have signed his motion include Kate Hoey, John Battle, Mark Fisher, Peter Kilfoyle, George Howarth and Janet Anderson.
John Cruddas, the former deputy leadership contender, and John McDonnell, the leftwinger who failed in his attempt last year to mount a leadership challenge against Mr Brown, have also signed.
The scale of the potential rebellion means that ministers and whips will still have to engage in furious lobbying before the amendment is voted on next Monday.
The Prime Minister himself was in conciliatory mood last night when he spoke to the Parliamentary Labour Party about the tax changes, promising he had listened to their concerns over the impact on the poorest workers and would “sort out” the problem by the autumn.
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If a decision to use 50 billion pounds of taxpayers' money to bail out banks (that, by the way, had made huge profits last year) can be taken so swiftly, surely the government can also act swiftly to remedy the effects of the abolishment of the 10p tax rate on the lower paid!
Dick, Durham, UK
I wish the conservatives would say that they would bring back the 10p tax rate and replace Government tax credit handouts with tax cuts. Get off the fence conservatives if you want to win the next election.
Mike Lincoln, WAKEFIELD,
GB promises to sort out the problem by the autumn.....
What he (and Darling) mean is they will bodge the next budget in some way - but its still a year away until it will be implemented.
Andrew, Doncaster,
"it is holding an inquiry into the impact of Budget measures on low-income households, particularly the effect of the 10p measure"
Isn't this something that should have been done before the tax bands were tinkered with? Surely Mr Darling knows the impact of his budget measures?
Nobby Clark, Perth,
To adjust tax rates, restoring a 10p (or similar) band, would be simple and cheap to implement administratively, for both government and employers as the software is already there. No doubt though, to save GB's face, we shall end up with some complicated, expensive dog's dinner
Tim , Dinan, France
So, If the government cannot go back on taxing low paid workers who cannot do anything about it, will they not go back on promises to tax the Non-Doms (in the budget) who are all wealthy, or will Mr Darling find compelling reasons to help the rich yet again.
Bernard, watford, uk
I will remember this. The chancellor can't make immediate changes - what a joke - he can make them when he wants to, as history dictates!
Tom, London,
"The Treasury yesterday announced that its own review of measures to tackle child poverty would be extended to include low-income households without children"
Why? I've worked hard to earn what I earn and never got an ounce of help from the tax man. Why should some waster get something for nothing?
Andrew Doyle, Manchester,
This mess is a result of poor policy appraisal. I worked in the Treasury in a small team of analysts that subjected new policy proposals to a detailed analysis of the possible unwanted effects. Our advice though correct was often not welcome - the team no longer exists.
Gavin Lidderdale, Woldingham, Surrey
Oh my, oh my - an enquiry! And what more ojn earth could anyone ask for? What more could anyone expect? Relax voters. Everything's alright again. It's ok to vote New Labour in the local elections.
And pork sandwiches have wings.
Robert, Hull, East Yorkshire
Probably in June? What good is that? Have I got to tell the gas and electricity company and the council and the water company that they'll have to wait until June for their payments? This whole affair is becoming more disgraceful by the day. This is NOT good enough.
judy, Liverpool, England
Good on you Frank.
Strange is'nt it, that those people who hold the most senior positions in government can tell you the square root of an egg but can't tell you how to cook it!!!
Roll on the 1st of May.
Bernie, Suffolk, UK
Why do we need an enquiry, from the moment the chancelor announced he was abolishing the 10p band it was clear that it would hit millions. Every time Labour want to avoid questions on a delicate subject they hold an enquiry and then refuse to take questions until the enquiry is over.
Dave, Sale, Cheshire
The people of this country are regularly being choked by the number of reviews and inquiries. How many more of these pointless bureaucratic processes need to be made? It is plainly unfair to expect the poor to suspend their suffering while politicians bide their time or in Brown's case dither away?
Tom, St. Albans, England
This shouldn't be about saving face. This policy is a mistake and the Govt should admit to it.
New Labour agian stealing from the poor to give to the rich!
Disapointed not to see my MP on the list step up JD!
Dean, Southampton, England
by doing away with the 10p tax band the goverment has saved 7billion pounds,what i would like to know is were has this money gone, i am 66 yrs old next, i was paying 10p in the pound, now im paying 20p in the pound, i ask you is this fair, if i save for a better standerd of liveing im means tested,
sp wright, atherton, greater manchester
I can't believe that even Labour MPs are daft enough to fall for the old 'we'll have an enquiry' trick. It's as ancient as the South Sea Bubble and quite probably older.
Frank Upton, Solihull,
incompetence that we do not claim. In addition we employed the services of an accountant to investigate their incorrect and inaccurate claims and they are disputing their findings. This government firmly believes they are Teflon coated
Stephen Southward, Sandbach, UK
It's time for Gordon to go. And if that means Labour too then so be it. How can the party who are supposed to be helping the least well off be allowed to get away with this tax abolition. Not least that it is probably because they need the revenue to fund those who are a whole lot better off.
Buster, Birmingham,
Is it not obvious that the whole point of taking away the 10p tax band and redistributing this revenue as family tax credits is no more than a crude ploy to encourage the 1.2 million couples without children (who are affected) to become parents and welfare dependents?
Jason Mead, Bristol, England
Isnât it obvious that the whole point of taking away the 10p tax band and âredistributingâ this revenue as family tax credits is no more than a crude ploy to encourage the 1.2 million couples without children (who are affected) to become parents and welfare dependents?
Jason Mead, Bristol, England
How many bad decisions is Mr. Brown allowed to make? Remember, he was the mastermind behind awarding the pensioners a 75p increase, he was the mastermind behind selling off our gold reserves at a rock bottom price, He was the behind the abolition of the married couples allowance, and now this.
Peter, Brixham, Devon
Everyone on a modest income will notice the effect of yet another wage cut from the labour goverment. Every year my disposable income shrinks as more and more financial burdens are put on us by this goverment.
Paul, Portsmouth, UK
I read also that Mr Brown is looking to enhance the Tax Credit system to compensate the lower income households. The Tax Credit system is an absolute shambles putting it mildly. My household income warrants claiming the Tax Credits however they have messed up so many things through their
Stephen Southward, Sandbach, UK
If the increasing cost of food and fuel are the issue, then the cause is the government. 75% of the cost of fuel is tax, and a large component of food costs is transportation. By reducing fuel taxes the price of both would come down without the need for income tax changes.
Tim Brookshaw, Atlanta, GA, USA
Why am I sceptical of this? with Labour's current "downturn" is this supposed to show the "People's Politicians" at work, the human side? The "Barrow load of monkeys" could learn a trick or two from this lot!!!
Graham , Littlehampton,
Mr Brown's ivory tower must indeed have superb sound insulation.
Mike L, Chippenham, Wilts.
A shamefull attack on the poorest in this country and a shambolic mess. The Labour Party are unfit to govern.
Peter, London,
Labour took my personel pension contributions can I have compensation for my loss and being taxed twice on the same money?
steve tea, manchester, cheshire
A simple spreadsheet shows the following losers and winners assuming no other allowances or expenses. £10000 -£179.16 / £12000 -£139.16 / £50000 +£404.84 / £100000 +£1404.64.so as you see can see MP's are well into the winners. Isn't it time that all low paid were completely excluded from tax
Tony , Leigh-on-Sea, Essex