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| Pressure mounts over tax changes | Pressure mounts over tax changes |
| (about 7 hours later) | |
| Ministers are coming under increasing pressure to rethink scrapping the lowest 10p rate of income tax, amid warnings it will hurt low earners. | Ministers are coming under increasing pressure to rethink scrapping the lowest 10p rate of income tax, amid warnings it will hurt low earners. |
| The Commons Treasury committee warned that single people without children, earning less than £18,500, would lose up to £232 a year. | The Commons Treasury committee warned that single people without children, earning less than £18,500, would lose up to £232 a year. |
| The Tories said it was a "tax-grab" on the lowest paid, and 73 Labour MPs have signed motions expressing concerns. | The Tories said it was a "tax-grab" on the lowest paid, and 73 Labour MPs have signed motions expressing concerns. |
| Treasury Minister Jane Kennedy said the government would not reverse the move. | Treasury Minister Jane Kennedy said the government would not reverse the move. |
| She told the BBC's Newsnight programme: "I can't see us reversing this tax change at all. | She told the BBC's Newsnight programme: "I can't see us reversing this tax change at all. |
| "I think it's an important package and it is a very important integral part of the tax changes." | "I think it's an important package and it is a very important integral part of the tax changes." |
| In last year's Budget, the then chancellor, Gordon Brown, cut the basic rate of income tax from 22% to 20% and increased tax credits. But he also scrapped the lowest, introductory - 10% - rate of income tax. | In last year's Budget, the then chancellor, Gordon Brown, cut the basic rate of income tax from 22% to 20% and increased tax credits. But he also scrapped the lowest, introductory - 10% - rate of income tax. |
| The changes came into force at the weekend, but MPs can still vote to reject them. | The changes came into force at the weekend, but MPs can still vote to reject them. |
| 'Unreasonable target' | 'Unreasonable target' |
| In a report, the Treasury committee claimed working-age people without children, and on incomes of under £18,500 a year, would be the "main losers". | |
| Chairman John McFall, a Labour MP, said 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". | Chairman John McFall, a Labour MP, said 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". |
| WINNERS AND LOSERS Winners: Most people/ with incomes of £18,000+Under £18,000 but aged 65+ and therefore eligible for higher personal allowancesUnder £18,000 but with young children and therefore eligible for child tax credits Losers: Under £18,000 and ineligible for working tax credits because under 25Retired early and therefore ineligible for higher personal allowancesPart-timer working insufficient hours to qualify for tax credits Different personal circumstances may affect final amountsSource: PWC | WINNERS AND LOSERS Winners: Most people/ with incomes of £18,000+Under £18,000 but aged 65+ and therefore eligible for higher personal allowancesUnder £18,000 but with young children and therefore eligible for child tax credits Losers: Under £18,000 and ineligible for working tax credits because under 25Retired early and therefore ineligible for higher personal allowancesPart-timer working insufficient hours to qualify for tax credits Different personal circumstances may affect final amountsSource: PWC |
| Within the last two months, 73 Labour MPs have signed at least one of three Commons motions expressing unease at the abolition of the 10p rate. | Within the last two months, 73 Labour MPs have signed at least one of three Commons motions expressing unease at the abolition of the 10p rate. |
| Conservative leader David Cameron said it was "the wrong time to ask the lower paid to pay higher taxes" and promised to campaign against the change in the run-up to next month's local elections in England and Wales. | Conservative leader David Cameron said it was "the wrong time to ask the lower paid to pay higher taxes" and promised to campaign against the change in the run-up to next month's local elections in England and Wales. |
| He added: "Our approach must be to do what we can to stop this tax-grab on some of Britain's poorest people." | He added: "Our approach must be to do what we can to stop this tax-grab on some of Britain's poorest people." |
| Meanwhile, former Labour minister Frank Field is proposing an amendment to the Finance Bill - which confirms the tax system changes - asking for the low-paid workers affected to be compensated. | Meanwhile, former Labour minister Frank Field is proposing an amendment to the Finance Bill - which confirms the tax system changes - asking for the low-paid workers affected to be compensated. |
| He said: "This is a group we should be saluting, who do some of the best jobs in our society for the least money." | He said: "This is a group we should be saluting, who do some of the best jobs in our society for the least money." |
| 'Saluting' | 'Saluting' |
| 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 Cabinet Office minister Ed Miliband, a close ally of Mr Brown, said: "When you look at the overall effect of the last Budget there are 16 million households, who gain, and the biggest gains go to the poorest 30% of people in our society. | But Cabinet Office minister Ed Miliband, a close ally of Mr Brown, said: "When you look at the overall effect of the last Budget there are 16 million households, who gain, and the biggest gains go to the poorest 30% of people in our society. |
| 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 |
| "Now, of course we could reverse all the changes made in that Budget but I think it would be the wrong thing to do, because I think it would make the tax system less fair than it is at the moment. | "Now, of course we could reverse all the changes made in that Budget but I think it would be the wrong thing to do, because I think it would make the tax system less fair than it is at the moment. |
| "And I think all the changes taken together make the tax system fairer and benefit the bottom third of our society, which is what a Labour Budget should do." | "And I think all the changes taken together make the tax system fairer and benefit the bottom third of our society, which is what a Labour Budget should do." |
| The prime minister's spokesman said: "The reform we made to the 10p rate was an integral part of last year's Budget. | 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. | "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." | "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." | 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 prime minister was in touch with Labour MPs "all the time", he added. |