Brown's 10p rate tax-grab is hurting millions

3.00.00pm BST (GMT +0100) Mon 21st Apr 2008

Gordon Brown [Image: Rex Features]

Labour is facing a growing backbench rebellion over the axing of the 10p rate. The Treasury has hinted there could be measures to help low earners who are worse off, but not for several months. Chancellor Alistair Darling is working on proposals that would offset some of the impact of the tax changes, but they would not come into effect until the autumn pre-Budget report at the earliest. MPs vote today on the second reading of the Finance Bill and a week today on amendments to the Bill.

Vince Cable, Liberal Democrat Shadow Chancellor said "The doubling of the 10p rate of tax is a £7bn tax grab from some of the poorest in society. The Government can try and dress this tax rise up as much as it wants. However, the fact remains that millions of low paid people are now paying more tax. The belated conversion of Labour backbenchers to oppose this tax rise is welcome, but it does raise questions of where were they on this issue last year. We have been arguing against this punitive tax measure for over 12 months, but it is only at the 11th hour that Labour MPs have decided to join us. Cuts in the basic rate of tax are welcome but this cannot be at the expense of those on very low incomes."