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Brown defends 'U-turn' on 10p tax Brown defends 'U-turn' on 10p tax
(20 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". The prime minister has defended moves to compensate pensioners, young people and childless people on low incomes who lost out from the 10p tax rate's axing.
The prime minister said there were better ways of helping low income households than the 10p rate. Gordon Brown's offer of backdated help came amid a continuing rebellion from Labour MPs over the issue.
But Mr Cameron said Mr Brown had only acted because he thought he would lose a vote on the issue next week. Tory leader David Cameron said the PM only acted to avoid defeat on it next week and accused him of "weakness, dithering and indecision".
"What this is about is weakness, dithering and indecision from the prime minister," he said at question time. Lib Dem leader Nick Clegg called Mr Brown "increasingly pointless".
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 at prime minister's questions came shortly after Chancellor Alistair Darling set out plans to help those on low incomes who may have lost out from the 10p tax rate's axing.
Rebel amendment withdrawnRebel amendment withdrawn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.
Do you have any idea what a pathetic figure you cut today? David Cameron to Gordon Brown In full: Darling's letterCommons: Point-by-point
Labour's Frank Field responded by withdrawing his amendment backed by 46 Labour MPs calling for compensation.
"We may, I hope, be marking phase two of Gordon Brown's premiership," he told the BBC, one where he would be "big enough" to admit if something had unintentionally gone wrong.
At prime minister's questions, Mr Cameron accused Mr Brown of making "panic concessions" in the face of a backbench revolt.
"Are you making these changes because you thought you would lose the vote next week?" he said.
Mr Brown replied: "We have said for some time we want to do more to help people on low incomes."
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. But Mr Cameron hit back: "Do you have any idea what a pathetic figure you cut today?
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." "You are making these changes because you thought you would lose the vote."
Quoting a number of Labour figures who have questioned the prime minister's handling of the affair, Mr Cameron said: "Isn't it the case that the Labour Party have finally worked out that they have a loser, not a leader?"
Mr Brown countered that Mr Cameron's "new found" interest in poverty had "lasted a few seconds".
He said the 10p rate was not the best way to boost the incomes of the low paid, who had benefited from improvements in tax credits and the minimum wage under Labour.
Winter fuel payments
"The central issue is we have taken more people out of poverty than any previous government," he told the Commons.
"The choice is very clear - between a Conservative Party that would cut the incomes of the poor and a Labour Party that will increase them."
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' The Treasury Committee has announced an inquiry into the affect 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. 'Government's intent'
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.
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. "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.
"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.
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 government had faced a rebellion next week when amendments are put forward relating to the abolition of the 10p rate, announceded in last year's Budget.