Brown's new woe on tax U-turn
Gordon Brown today faced a double whammy over the 10p tax rate row - claims that his concessions are already unravelling on top of the damage to his standing caused by his climbdown, writes London Editor John Hipwood.
Gordon Brown today faced a double whammy over the 10p tax rate row - claims that his concessions are already unravelling on top of the damage to his standing caused by his climbdown, writes London Editor John Hipwood.
Former Labour minister Frank Field, the leader of the Labour tax rebels, warned the Prime Minister and Chancellor Alistair Darling that there must be no backtracking over yesterday's Government U-turn.
He said that Mr Brown had agreed that the compensation package for groups hit by the abolition of the 10 per cent tax band would be backdated to April 1.
But ministers refused to confirm that all 5.3 million workers - from single childless people to those aged 60-64 - would be compensated.
Shadow chancellor George Osborne claimed that the deal was already unravelling less than 24 hours after it was announced in a letter from Mr Darling to all Labour MPs.
Mr Field called for a "clear statement" from the Government that all the elements of the package to compensate households hit by the dropping of the 10p rate would be backdated.
"This is an agreement that the Prime Minister actually put his stamp on. The agreement - there is no mistake about this - will be backdated to April 1.
"This package is now felt to be owned by the House of Commons. The House of Commons is aggrieved that we got ourselves into a position where some of the poorest in work appeared to be punished by these tax changes. Nobody wants that to happen," said the former social security minister.
The potential for further tax trouble is the last thing Mr Brown needs after his drubbing in the Commons yesterday at the hands of David Cameron and Nick Clegg.
The Prime Minister, due in Wolverhampton this afternoon to campaign for Labour candidates in next week's local elections, is already besieged by economic problems including record fuel prices, higher food costs and falling house prices.
All that was topped off today by a series of strikes in the public sector led by teachers and civil servants.
Mr Brown had repeatedly insisted that he would not bow to the Labour tax rebels, but, facing the prospect of defeat in a crucial Commons vote next Monday, he was forced to back down.
He said last night that he was not being "pushed about" by his own party, insisting: "The fundamental element of the 2007 Budget was abolishing the 10p income tax rate, and that is still going ahead."
