Labour MP votes against compensation for those hit by 10p tax fiasco

July 23, 2009 11:55 PM

Newcastle East's Labour MP has voted against compensation for people on below average earnings who lost out when the 10p tax rate was abolished by Gordon Brown. Some people on very low incomes have seen their effective marginal rate of tax double.

In the Commons an amendment to compensate those affected was defeated by a Labour majority of 43. Once again Nick Brown chose to put Labour Party loyalty ahead of the interests of local people, as he has previously done on votes on student tuition fees, fuel poverty, and closure of post offices.

By contrast, Lib Dems have called for a £700 reduction in income tax, taking those earning less than £10,000 out of the tax system.

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 - including thousands of people in Newcastle East - saw their tax bills increase to fund cuts for those who are paid more. At 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.

Lib Dem Parliamentary Spokesman Greg Stone said "This was an opportunity for Nick Brown to vote for a fairer tax system which addressed the injustice of those on lower incomes paying more tax whilst those on higher incomes paid less. It is a massive letdown for local people who have been affected and shows that he will always put the interests of Gordon Brown ahead of the interests of Newcastle East.