Brown faces 70 rebels in tax battle

Published on Saturday 19 April 2008 19:43

GORDON Brown was on a collision course with Labour's 10p tax rate rebels last night after the Government set its face against concessions.

Some 70 backbenchers and six ministerial aides expressed concern over abolishing the lowest band, amid warnings that millions of society's poorest will be hit.

A number of Parliamentary Private Secretaries – the lowest rung on the ministerial ladder – have spoken publicly about their reservations over the decision to scrap the 10p rate.

Jeff Ennis, aide to Cabinet Office Minister Ed Miliband – one of Brown's closest allies – said "everybody has concerns" over the decision.

Celia Barlow, aide to Science Minister Ian Pearson, has written to Brown about the issue and Dave Anderson, PPS to Higher Education Minister Bill Rammell, told the Evening Standard: "We are doing the wrong thing here."

Stephen Pound, PPS to Employment Minister Stephen Timms, said the issue had become "corrosive" and there was a "groundswell" of people who were not happy about it.

But Government sources quickly moved to play down the chances of a compromise. Treasury Chief Secretary Yvette Cooper went further last night by appearing to rule out either reversing the changes – which were announced in last year's Budget – or offering compensation to the worst affected.

"You have to remember, of course, that when you have a major package of changes like this it isn't possible to help everyone in any one Budget," she said.

Asked whether additional compensation for low earners was an option, she replied: "What I'm saying is that for those who haven't benefited from this year's package of reforms, they will have benefited already from previous Budgets, from previous changes."

Treasury sources have suggested that any scheme to redress the situation could cost up to 8bn, but expressed hope that a solution could be reached "in the fullness of time".

The tax change, which came into force earlier this month, has left many Labour MPs uneasy.

More than 70 have signed one of three Commons motions calling for action on the abolition of the 10p rate.