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Darling 'promises to act on tax' Darling 'promises to act on tax'
(about 4 hours later)
Chancellor Alistair Darling has told MPs he will act "within this financial year" to answer concerns about ending the 10p tax rate, the BBC has learned.Chancellor Alistair Darling has told MPs he will act "within this financial year" to answer concerns about ending the 10p tax rate, the BBC has learned.
He made the commitment during a meeting aimed at quelling a rebellion which could see the government lose a Commons vote next week, several MPs said.He made the commitment during a meeting aimed at quelling a rebellion which could see the government lose a Commons vote next week, several MPs said.
Some 39 Labour backbenchers have signed a motion criticising the change.Some 39 Labour backbenchers have signed a motion criticising the change.
Meanwhile Treasury committee MPs are to hold a short inquiry into the effect of axing the 10p income tax rate. Lib Dem leader Nick Clegg has told the BBC his party will support any moves to compensate people who have lost out.
Meanwhile, Treasury committee MPs are to hold a short inquiry into the effect of axing the 10p income tax rate.
'Compensation'
Opponents say it is unfair as it will hit some 5.3 million of the UK's lowest earners.Opponents say it is unfair as it will hit some 5.3 million of the UK's lowest earners.
Following a cabinet meeting earlier, the government said it would be "working hard" to allay fears.Following a cabinet meeting earlier, the government said it would be "working hard" to allay fears.
'Compensation'
Mr Darling's meeting was part of this strategy and, according to several MPs, he promised: "We will take action within this financial year."Mr Darling's meeting was part of this strategy and, according to several MPs, he promised: "We will take action within this financial year."
EFFECTS OF TAX CHANGES Winners: Most people with incomes of £17,500+Under £17,500 but aged 65+ and therefore eligible for higher personal allowancesUnder £17,500 but with young children and therefore eligible for child tax credits Losers: Under £17,500 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 £17,500+Under £17,500 but aged 65+ and therefore eligible for higher personal allowancesUnder £17,500 but with young children and therefore eligible for child tax credits Losers: Under £17,500 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
Some MPs said they thought Mr Darling might consider backdating compensation for low earners who have lost money.Some MPs said they thought Mr Darling might consider backdating compensation for low earners who have lost money.
But Treasury sources said all options were on the table and no details had been decided. After the meeting, Mr Darling said it had been "very useful".But Treasury sources said all options were on the table and no details had been decided. After the meeting, Mr Darling said it had been "very useful".
The Finance Bill - which enacts this year's Budget - was given a second reading on Monday evening when MPs approved it by 298 votes to 223.The Finance Bill - which enacts this year's Budget - was given a second reading on Monday evening when MPs approved it by 298 votes to 223.
But the government could faces a likely rebellion next week when amendments are put forward relating to the abolition of the 10p rate, introduced in last year's Budget.But the government could faces a likely rebellion next week when amendments are put forward relating to the abolition of the 10p rate, introduced in last year's Budget.
Frank Field, the Labour MP heading the revolt, said 39 backbenchers had signed his amendment, which seeks compensation for those who lose out.Frank Field, the Labour MP heading the revolt, said 39 backbenchers had signed his amendment, which seeks compensation for those who lose out.
'Commitment'
If they, and all opposition parties back him, the government would be defeated.If they, and all opposition parties back him, the government would be defeated.
The cross-party Treasury committee's inquiry will look into the effects of the abolition of the 10p rate, as well as the impact of other Budget decisions on low-income households. 'Absolute uproar'
Liberal Democrat leader Mr Clegg told the BBC the abolition of the 10p rate had caused "absolute uproar amongst the poorest, most vulnerable families, who are feeling overstretched already".
Asked whether his party would support Mr Field's amendment, he said: "We will support any amendments and we might well put forward our own amendments which will mitigate, reverse the damage done to those poorest individuals who are being hit by this measure."
HAVE YOUR SAYI will benefit from the tax changes but I think they are immoral Christine, Belper Send us your comments
Conservative leader David Cameron has pledged to "stop the government in its tracks" and make them "think again" over abolishing the 10p rate.
The cross-party Treasury committee's inquiry will look into its effects, as well as the impact of other Budget decisions on low-income households.
It aims to produce its recommendations for action before the Finance Bill completes its final passage through the Commons, probably no earlier than June.It aims to produce its recommendations for action before the Finance Bill completes its final passage through the Commons, probably no earlier than June.
BBC political editor Nick Robinson said this could delay any rebellion by Labour MPs during next week's vote on Mr Field's amendment.BBC political editor Nick Robinson said this could delay any rebellion by Labour MPs during next week's vote on Mr Field's amendment.
It would also mean any Commons embarrassment came after next week's local elections in England and Wales.It would also mean any Commons embarrassment came after next week's local elections in England and Wales.
Earlier, the prime minister's spokesman said Chief Whip Geoff Hoon had told ministerial colleagues it was "important that all ministers in cabinet explained to those who had concerns what the government's position was". Earlier the prime minister's spokesman again refused to say whether Gordon Brown saw the tax issue as a "confidence vote", simply describing it as "important".
class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAYI will benefit from the tax changes but I think they are immoral Christine, Belper class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=4644">Send us your comments He said the government would be "working hard during the course of the next week to persuade MPs of the merits of its case".
But he again refused to say whether Gordon Brown saw the tax issue as a "confidence vote", simply describing it as "important".
The spokesman said the government would be "working hard during the course of the next week to persuade MPs of the merits of its case".
It is not known how many Labour MPs will vote against the abolition of the 10p rate but, in recent months, more than 70 have signed motions raising concerns about the issue.
Pendle MP Gordon Prentice said: "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 at a Parliamentary Labour Party meeting on Monday by promising to "sort out" the financial impact of the tax change on some of Britain's poorest households.
The changes, which came into force this month, abolished the 10% starter rate of income tax, but lowered the basic rate from 22% to 20%.The changes, which came into force this month, abolished the 10% starter rate of income tax, but lowered the basic rate from 22% to 20%.
The 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 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.
Ministers say rises in child benefits, state pensions and tax credits have gone up, benefiting millions of people.Ministers say rises in child benefits, state pensions and tax credits have gone up, benefiting millions of people.