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Brown defends 'U-turn' on 10p tax Brown defends 'U-turn' on 10p tax
(40 minutes later)
Gordon Brown has defended moves to compensate people hit by the abolition of the 10p tax rate after David Cameron claimed it was a sign of "weakness".Gordon Brown has defended moves to compensate people hit by the abolition of the 10p tax rate after David Cameron claimed it was a sign of "weakness".
The prime minister said there were better ways of helping low income households than the 10p rate.The prime minister said there were better ways of helping low income households than the 10p rate.
But Mr Cameron said Mr Brown had only acted because he thought he would lose a vote on the issue next week.But Mr Cameron said Mr Brown had only acted because he thought he would lose a vote on the issue next week.
"What this is about is weakness, dithering and indecision from the prime minister," he said at question time."What this is about is weakness, dithering and indecision from the prime minister," he said at question time.
The heated exchanges came just minutes after Chancellor Alistair Darling announced that pensioners and young people who have lost money as a result of the abolition of the 10p tax rate would be given compensation.The heated exchanges came just minutes after Chancellor Alistair Darling announced that pensioners and young people who have lost money as a result of the abolition of the 10p tax rate would be given compensation.
Rebel amendment withdrawnRebel amendment withdrawn
In what will be seen as a U-turn forced by Labour rebels, the chancellor said he would assess the loss to pensioners aged 60-64 and childless people.In what will be seen as a U-turn forced by Labour rebels, the chancellor said he would assess the loss to pensioners aged 60-64 and childless people.
The compensation deal will be unveiled in the autumn and backdated to April.The compensation deal will be unveiled in the autumn and backdated to April.
HAVE YOUR SAY Despite being a gainer from these changes, I am appalled that the lowest paid are the losers Helen Higgs Send us your commentsHAVE YOUR SAY Despite being a gainer from these changes, I am appalled that the lowest paid are the losers Helen Higgs Send us your comments
Labour's Frank Field said his amendment calling for compensation and backed by 46 Labour MPs would be withdrawn.Labour's Frank Field said his amendment calling for compensation and backed by 46 Labour MPs would be withdrawn.
The prime minister's official spokesman said: "There is no question of not going ahead with the abolition of the 10p tax rate. It was the right thing to do."The prime minister's official spokesman said: "There is no question of not going ahead with the abolition of the 10p tax rate. It was the right thing to do."
Mr Darling outlined his proposals in a letter to John McFall, the Labour chairman of the Commons Treasury Select Committee.Mr Darling outlined his proposals in a letter to John McFall, the Labour chairman of the Commons Treasury Select Committee.
He said he would be looking at changes to the winter fuel payment system, tax credits and the minimum wage in order to compensate those losing out from the ending of the 10p rate.He said he would be looking at changes to the winter fuel payment system, tax credits and the minimum wage in order to compensate those losing out from the ending of the 10p rate.
'More generous''More generous'
The Treasury Committee has announced an inquiry into the effect of the Budget measures on the low paid.The Treasury Committee has announced an inquiry into the effect of the Budget measures on the low paid.
In his letter, Mr Darling said the introduction of a "more generous" tax credits system had meant the 10p tax rate, as a means of helping low-income households, had outlived its usefulness.In his letter, Mr Darling said the introduction of a "more generous" tax credits system had meant the 10p tax rate, as a means of helping low-income households, had outlived its usefulness.
"The main two groups we now want to do more to help are, first, other low paid workers without children, and, second, pensioners under 65," he said. Brown's problem is his reputation as a ditherer who blinks in the face of defeat BBC political editor Nick Robinson class="" href="http://www.bbc.co.uk/blogs/nickrobinson/2008/04/humiliation_for.html">Read Nick's thoughts in full "The main two groups we now want to do more to help are, first, other low paid workers without children, and, second, pensioners under 65," he said.
"For pensioners aged 60-64, whose incomes tend to be more stable, we have put in hard work to see if those households who have lost out from the removal of the 10p starting rate of income tax can be helped through the mechanism that already exists to pay the Winter Fuel Allowance,"For pensioners aged 60-64, whose incomes tend to be more stable, we have put in hard work to see if those households who have lost out from the removal of the 10p starting rate of income tax can be helped through the mechanism that already exists to pay the Winter Fuel Allowance,
"As a sign of the government's intent, we do not wish to wait unnecessarily until November."As a sign of the government's intent, we do not wish to wait unnecessarily until November.
"Whatever conclusions we come to, all the changes will be backdated to the start of this financial year.""Whatever conclusions we come to, all the changes will be backdated to the start of this financial year."
Mr Darling said he had also asked the Low Pay Commission to report on what changes could be made to the minimum wage regime to support young workers.Mr Darling said he had also asked the Low Pay Commission to report on what changes could be made to the minimum wage regime to support young workers.