LABOUR MPs URGED TO HELP THOSE HIT BY 10p TAX AXE

July 7, 2009 9:16 AM

A senior Newcastle Liberal Democrat is calling on Labour MPs to back an amendment forcing Gordon Brown to help the people worst hit by the abolition of the 10p income tax rate.

Ron Beadle, Parliamentary spokesman for Newcastle North, said the Labour Government had a duty to help those on low incomes.

He said: "I was appalled by what the Government did - essentially they have taxed those on middle and lower incomes to fund tax breaks for the rich.

"Thousands of people across Newcastle have been badly affected by this and have to pay more in income tax at a time when the financial crisis is hitting everyone.

"They deserve to be compensated for what they have lost.

"Temporary measures were brought in to help ease the burden for middle and low income households, but they have now ended and thousands of local people will be hit hard in the wallet.

"This is another blow for hard-working people and families.

"Gordon Brown's unpopular and unfair actions have caused hardship for millions of people nationwide.

"He either hasn't noticed or doesn't care about public opinion or even what many in his own party want.

"Labour MPs should join the Liberal Democrats in supporting Frank Field's ammendment."

The Prime Minister is facing a major backbench revolt as many Labour MPs are expected to support former minister Frank Field's amendment.

He and former Labour whip Greg Pope have tabled an amendment to the Finance Bill, which is coming before the Commons, which would force ministers to agree payments to the worst-off.

The level of Labour support, combined with Opposition backing, raises the prospect of a humiliating defeat for the Government.

If passed, the amendment would force the Treasury to come up with detailed compensation proposals before the Commons would allow it to continue levying any income tax.

Gordon Brown did away with the 10p starting rate in his last Budget as Chancellor, in 2007, to fund a 2p cut in the standard rate of tax.

The change meant that anybody earning less than £18,500 a year saw their tax bills increase to fund cuts for those who are paid more.

The Government headed off an earlier revolt last year - by promising compensation for those who lost out by the decision to scrap the lowest tax band, including larger personal tax allowances.

But the rebels say that at least 1.3 million people are still worse off by more than £1 a week, with more out of pocket by less than £1 a week.