July 7, 2009 11:15 PM

A Newcastle Labour MP has been criticised for voting against compensation for people who lost out when the 10p tax rate was abolished by Gordon Brown.

Newcastle North campaigner Ron Beadle had called on Doug Henderson to support a Commons amendment which aimed to help those still paying the price of Labour's 10p tax axe.

However, Mr Henderson once again choose to put Labour Party loyalty ahead of the interests of local people.

Ron Beadle said: "Newcastle has a large number of people on low incomes who have been really hurt by Gordon Brown's decision to scrap the 10p tax rate.

"This amendment would have ensured that no-one would have lost money from that shameful decision. That's why I hoped Mr Henderson MP would support constituents who have lost out.

"This is a bitter blow for campaigners who have been arguing for fairness in our tax system. Some people on very low incomes have seen their marginal tax rates double. Those people should have been taken out of the tax system altogether.

"In a time of recession, these pounds and pence make a real difference to people struggling on low incomes. It is very sad that our Labour MP has voted to support Gordon Brown rather than support the people in Newcastle who need it most."

Former Labour Minister Frank Field had tabled an ammendment to the Finance Bill, which if passed, would forced 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 said 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.

:: The Division in question is on the proposed new Clause 1 of the Finance Bill


Votes of individual MPs can be found at: