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Low-paid hit by tax changes - MPs | Low-paid hit by tax changes - MPs |
(about 2 hours later) | |
The decision to abolish the lowest income tax band penalises childless people in low-paid jobs, MPs have said. | The decision to abolish the lowest income tax band penalises childless people in low-paid jobs, MPs have said. |
The Treasury Select Committee warned the "main losers" could be deprived of as much as £232 a year. | The Treasury Select Committee warned the "main losers" could be deprived of as much as £232 a year. |
Chairman John McFall said they were an "unreasonable target" for the tax simplification measure. | Chairman John McFall said they were an "unreasonable target" for the tax simplification measure. |
Business Secretary John Hutton has said there will be no rethink on the 10p rate, despite unhappiness among some Labour MPs. | |
Standard income tax has been cut from 22% to 20% and tax credits increased, but the lowest 10p band has been scrapped entirely. | Standard income tax has been cut from 22% to 20% and tax credits increased, but the lowest 10p band has been scrapped entirely. |
'Laudable aim' | 'Laudable aim' |
In its report on the Budget, the committee said households without children or anyone over the age of 65, and on incomes of under £18,500 a year, would lose out. | In its report on the Budget, the committee said households without children or anyone over the age of 65, and on incomes of under £18,500 a year, would lose out. |
They seemed an "unreasonable target for raising additional tax revenues to fund the benefits of tax simplification and meeting the needs of children in poverty". | They seemed an "unreasonable target for raising additional tax revenues to fund the benefits of tax simplification and meeting the needs of children in poverty". |
Our approach must be to do what we can to stop this tax-grab on some of Britain's poorest people David CameronConservatives Treasury faces 'challenge' | |
Mr McFall, a Labour MP, added: "While tax simplification is a laudable aim, it seems strange that the abolition of the 10p starting rate of income tax disadvantages mainly low-income households." | Mr McFall, a Labour MP, added: "While tax simplification is a laudable aim, it seems strange that the abolition of the 10p starting rate of income tax disadvantages mainly low-income households." |
He said "appropriate help" must be given to ensure they get the right benefits and called the report a "sober analysis" which had "reminded the government of its responsibilities". | He said "appropriate help" must be given to ensure they get the right benefits and called the report a "sober analysis" which had "reminded the government of its responsibilities". |
Last week, former Labour whip Greg Pope tabled a Commons motion calling for action, signed by 30 Labour MP. | Last week, former Labour whip Greg Pope tabled a Commons motion calling for action, signed by 30 Labour MP. |
This was withdrawn after he was "given assurances" by ministers they would examine its impact. | This was withdrawn after he was "given assurances" by ministers they would examine its impact. |
'Wrong time' | |
Speaking at his monthly press conference, Conservative leader David Cameron said the tax changes were coming "at the wrong time to ask the lower paid to pay higher taxes". | |
He added: "People are seeing it when they are shopping, running a car or paying a mortgage... | |
"Our approach must be to do what we can to stop this tax-grab on some of Britain's poorest people." | |
HAVE YOUR SAYNew Labour's vicious tax policies have increased the burden on the poorest among usSteve, SunderlandSend us your comments | HAVE YOUR SAYNew Labour's vicious tax policies have increased the burden on the poorest among usSteve, SunderlandSend us your comments |
Lib Dem leader Nick Clegg said the abolition of the 10p rate had been a "cheap political stunt" to allow Mr Brown to take 2p off the basic rate of income tax "for the following day's headlines". | Lib Dem leader Nick Clegg said the abolition of the 10p rate had been a "cheap political stunt" to allow Mr Brown to take 2p off the basic rate of income tax "for the following day's headlines". |
But Business Secretary John Hutton told the BBC he did not think it possible to go back on the decision, which had to be seen as part of a wider package of tax cuts. | But Business Secretary John Hutton told the BBC he did not think it possible to go back on the decision, which had to be seen as part of a wider package of tax cuts. |
He said the government had cut the main rate of income tax, leaving families with children "significantly better off", while those who were left worse off would lose only "about 0.5% of net income". | He said the government had cut the main rate of income tax, leaving families with children "significantly better off", while those who were left worse off would lose only "about 0.5% of net income". |
The chairman of the Parliamentary Labour Party, Tony Lloyd, said he did not believe Labour backbenchers would vote against the Finance Bill, which confirms the tax changes. | The chairman of the Parliamentary Labour Party, Tony Lloyd, said he did not believe Labour backbenchers would vote against the Finance Bill, which confirms the tax changes. |
"Labour MPs, in the end, are going to support the thrust of the government's policy because it's the government that will get them elected as Labour MPs," he said. | "Labour MPs, in the end, are going to support the thrust of the government's policy because it's the government that will get them elected as Labour MPs," he said. |
The committee also warned that Chancellor Alistair Darling's forecast of economic growth in the next two years was "more optimistic than the consensus view". | The committee also warned that Chancellor Alistair Darling's forecast of economic growth in the next two years was "more optimistic than the consensus view". |
It also had concerns about new rules which will require "non-domiciled" taxpayers resident in the UK to pay a £30,000 levy to retain non-dom status, which it said could hurt millions of relatively low-paid foreign workers. | It also had concerns about new rules which will require "non-domiciled" taxpayers resident in the UK to pay a £30,000 levy to retain non-dom status, which it said could hurt millions of relatively low-paid foreign workers. |