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Low-paid hit by tax changes - MPs | Low-paid hit by tax changes - MPs |
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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. |
The Conservatives called the change a "tax-grab". But the government said it was an "integral part" of a "coherent package of reforms". | |
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' | 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' | 'Wrong time' |
Speaking at his monthly news 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... | 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." | "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". |
The prime minister's spokesman said: "The reform we made to the 10p rate was an integral part of last year's Budget. | |
"That Budget included a reduction by 2% in the basic rate of income tax from 22% to 20% which will benefit millions of people. | |
"It will lead to a significant increase in pensioner tax allowance, a widening of the working tax credit and increases in child benefit and child tax credit." | |
Asked if changes could be made, he said: "This was a coherent package of reforms." | |
The prime minister was in touch with Labour MPs "all the time", he added. | |
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. |