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Darling moves to avert tax defeat Darling moves to avert tax defeat
(30 minutes later)
Chancellor Alastair Darling is to meet Labour MPs in a bid to avert a House of Commons defeat on the abolition of the 10p income tax rate.Chancellor Alastair Darling is to meet Labour MPs in a bid to avert a House of Commons defeat on the abolition of the 10p income tax rate.
More than 35 Labour MPs have so far signed a rebel motion challenging Gordon Brown's decision to scrap it.More than 35 Labour MPs have so far signed a rebel motion challenging Gordon Brown's decision to scrap it.
They are angry that millions of low earners have been left worse off after changes in last year's Budget.They are angry that millions of low earners have been left worse off after changes in last year's Budget.
The prime minister said he understands their concerns and will look at ways of helping those who lost out.The prime minister said he understands their concerns and will look at ways of helping those who lost out.
The Finance Bill - which enacts the Budget including scrapping the 10p tax band - was given a second reading on Monday evening when MPs approved it by 298 votes to 223.The Finance Bill - which enacts the Budget including scrapping the 10p tax band - was given a second reading on Monday evening when MPs approved it by 298 votes to 223.
But the government faces a likely rebellion when the 10p rate is considered next week.But the government faces a likely rebellion when the 10p rate is considered next week.
Compensation callsCompensation calls
A total of 35 backbenchers have now put their name to an amendment tabled by former minister Frank Field, which would delay getting rid of the 10p rate until measures are in place to compensate those who lose out.A total of 35 backbenchers have now put their name to an amendment tabled by former minister Frank Field, which would delay getting rid of the 10p rate until measures are in place to compensate those who lose out.
But in total, more than 70 Labour MPs have signed motions raising concerns about the issue. It is not known how many will vote against the measure.But in total, more than 70 Labour MPs have signed motions raising concerns about the issue. It is not known how many will vote against the measure.
EFFECTS OF TAX CHANGES 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 Tax changes explainedAnalysis: Darling's optionsEFFECTS OF TAX CHANGES 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 Tax changes explainedAnalysis: Darling's options
Pendle MP Gordon Prentice told BBC 2's Newsnight: "People who have lost out have got to be fully compensated and they have got to be told when they are going to get their money by the end of next week."Pendle MP Gordon Prentice told BBC 2's Newsnight: "People who have lost out have got to be fully compensated and they have got to be told when they are going to get their money by the end of next week."
He added: "The fact is that if the Budget goes down, if this key clause goes down, then I don't think the government can survive."He added: "The fact is that if the Budget goes down, if this key clause goes down, then I don't think the government can survive."
Mr Brown tried to head off the rebellion on Monday by promising to "sort out" the financial impact of the tax change on some of Britain's poorest households.Mr Brown tried to head off the rebellion on Monday by promising to "sort out" the financial impact of the tax change on some of Britain's poorest households.
Party whips have also told MPs a vote against the bill will be a vote of no confidence in the government.Party whips have also told MPs a vote against the bill will be a vote of no confidence in the government.
Mr Darling has said he "would return" in future Budgets to help those hit by the move.Mr Darling has said he "would return" in future Budgets to help those hit by the move.
BBC political correspondent Carole Walker says the chancellor will come under pressure to spell out more details of the governments plans when he talks to Labour MPs. BBC political correspondent Carole Walker says the chancellor will come under pressure to spell out more details of the government's plans when he talks to Labour MPs.
Under the tax changes which came into force this month, low earners who would have paid income tax at the lowest, introductory 10% rate now have to pay the 20% rate. Meanwhile the basic rate of income tax has been lowered from 22p to 20p.Under the tax changes which came into force this month, low earners who would have paid income tax at the lowest, introductory 10% rate now have to pay the 20% rate. Meanwhile the basic rate of income tax has been lowered from 22p to 20p.
The Commons Treasury committee has said single people with no children earning under £18,500 will lose up to £232 a year as a result of the changes.The Commons Treasury committee has said single people with no children earning under £18,500 will lose up to £232 a year as a result of the changes.
Scrapping the 10p rate was part of a range of measures which have been introduced in April - child benefits, state pensions and tax credits have gone up. The government says the changes are already benefiting millions of people.Scrapping the 10p rate was part of a range of measures which have been introduced in April - child benefits, state pensions and tax credits have gone up. The government says the changes are already benefiting millions of people.