Belfast Telegraph

Friday 1 August 2014

100,000 'will lose out in 10p tax row'

More than 100,000 people across Northern Ireland will still lose out from the scrapping of the 10p tax rate as Gordon Brown's compensation pledge unravels, the Tories have claimed.

The party seized on figures produced by the Independent Institute for Fiscal Studies (IFS) as evidence that the prime minister's U-turn would fail to bail out the 5.3m losers, as promised.

According to the IFS, just 61,675 of the 165,758 Ulster households hit by the 10p rate abolition would receive compensation under the measures pledged by Mr Brown on Wednesday.

That would leave 104,083 people still out of pocket, mainly the low-paid without children who would be missed by changes to tax credits, with around 3.3m people affected across the UK.

Shadow Chancellor George Osborne accused ministers of "backsliding" on their compensation package, which Labour MPs hoped would take the sting out of the 10p tax rate row.

Mr Osborne said: "The Government appears to have conceded that they are not compensating everyone. They are now backsliding on it.

"More and more people are waking up to the fact that the prime minister's U-turn is not all that is was cracked to be. He has made a mess of it."

Chancellor Alistair Darling has faced criticism for refusing to pledge that aid would be "backdated" to the start of this month, using the word "offset" instead.

The measures will be implemented "for this year", but firm details of changes to tax credits will not be unveiled until the autumn.

In the meantime, only pensioners under 65 losing out from the tax changes were given an explicit commitment that they will receive backdated payments, through the winter fuel allowance.

Frank Field, the Labour backbencher who led the threatened revolt, said " 400 MPs" would be in revolt before Monday's debate on the Finance Bill if the compensation pledge was watered down.

The ongoing row crushed Labour hopes that the controversy was over, with the withdrawing of the rebel amendment that threatened defeat for Mr Brown on Monday.

In the Commons, Mr Darling told MPs "it will take time" to finalise compensation details, urging MPs to wait until this autumn's pre-Budget report.

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