This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/7359966.stm

The article has changed 13 times. There is an RSS feed of changes available.

Version 9 Version 10
Cabinet urged to win over rebels Darling 'promises to act on tax'
(about 4 hours later)
The government will be "working hard" over the next week to head off a Commons defeat over abolishing the 10p income tax band, Downing Street says. 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.
The prime minister's spokesman said Chancellor Alistair Darling would meet Labour MPs threatening to rebel. 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 MPs are said to have signed a motion attacking the tax move - enough to overturn it in a vote. Some 39 Labour backbenchers have signed a motion criticising the change.
They say the change is hurting low earners. The government has promised to look at ways of helping those affected. Meanwhile Treasury committee MPs are to hold a short inquiry into the effect of axing the 10p income tax rate.
The abolition of the 10p starter rate of income tax was debated at a cabinet meeting on Tuesday morning. Opponents say it is unfair as it will hit some 5.3 million of the UK's lowest earners.
'Important' Following a cabinet meeting earlier, the government said it would be "working hard" to allay fears.
The prime minister's spokesman said Chief Whip Geoff Hoon had told colleagues it was "important that all ministers in cabinet explained to those who had concerns what the government's position was". 'Compensation'
But he again refused to say whether Prime Minister Gordon Brown saw the issue as a "confidence vote", simply describing it as "important". 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 £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 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 options
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". Some MPs said they thought Mr Darling might consider backdating compensation for those who have lost money as a result of the tax change.
The number of Labour backbenchers who have signed a motion challenging the tax decision is enough to defeat the government if they and all opposition MPs voted that way in next week's Commons vote. 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 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 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 from the 10p tax move.Frank Field, the Labour MP heading the revolt, said 39 backbenchers had signed his amendment, which seeks compensation for those who lose out from the 10p tax move.
'Compensated' 'Commitment'
He said: "The division is not about defeating the government at all. It is about saying the Budget will go through. If they, and all opposition parties back him, the government would be defeated.
Mr Field said: "The division is not about defeating the government at all. It is about saying the Budget will go through.
"But, as it goes through, we want a commitment from the government that those maybe five million plus people who lose out as a result of the abolition of the 10p [rate] will be compensated for that loss and that that compensation will be backdated to the beginning of the financial year.""But, as it goes through, we want a commitment from the government that those maybe five million plus people who lose out as a result of the abolition of the 10p [rate] will be compensated for that loss and that that compensation will be backdated to the beginning of the financial year."
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".
HAVE YOUR SAYI will benefit from the tax changes but I think they are immoral Christine, Belper Send us your commentsHAVE YOUR SAYI will benefit from the tax changes but I think they are immoral Christine, Belper Send us your comments
But he again refused to say whether Gordon Brown saw the 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 more than 70 have signed motions raising concerns about the issue.It is not known how many Labour MPs will vote against the abolition of the 10p rate but more than 70 have signed motions raising concerns about the issue.
Pendle MP Gordon Prentice said: "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 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."
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 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.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.
MPs' report
In the meantime, the cross-party Treasury committee will hold an inquiry into the effects of the abolition of the 10p rate, as well as the impact of other Budget decisions on low-income households.
It aims to produce a report with recommendations for action before the Finance Bill completes its passage through the Commons.
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.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. Meanwhile, the basic rate 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 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 took effect earlier this month. Child benefits, state pensions and tax credits have gone up. Scrapping the 10p rate was part of a range of measures which took effect earlier this month.
The government says the changes are already benefiting millions of people. Child benefits, state pensions and tax credits have gone up. The government says the changes are already benefiting millions of people.