Darling's attempts to quell 10p tax rebellion provoke outrage

Politics

Bank of England's £50bn mortgage plan

Monday, April 21, 2008

By Colin Brown

Rebel Labour MPs who oppose the scrapping of the 10p tax rate warned Gordon Brown yesterday that they would stand firm over their demands despite the offer of government concessions next year to soften the blow for the low-paid workers.

In a snub to the olive branch held out by Alistair Darling, the Chancellor, as he attempted to head off the most damaging rebellion the Government has faced since Mr Brown came to power, Frank Field, the former minister leading demands for a package of special help for the poorest earners, said the measures offered were insufficient.

"The talk about bringing forward a package this year or maybe next year just will not do," said Mr Field. "Unlike any other disquiet there has been on the backbenches, this is an issue which strikes at the core value that every Labour MP brings into politics – that is, that we are here to protect the poorest."

In a desperate attempt to prevent a shattering defeat on Mr Field's rebel amendment, Mr Brown and Mr Darling will be stepping up their arm-twisting of Labour MPs when they return to the Commons today after a two-week break.

The Prime Minister, who announced the reforms to the tax system when he was Chancellor last year, knows this week will be crucial in his attempts to re-assert his authority. He is furious at the way his trip to Washington was overshadowed by the rebellion at home. President George Bush privately told Mr Brown he was baffled by the "ten pee" row, saying he thought it was a town in the mid-West.

Despite Mr Darling's best efforts, however, his choreographed attempts to buy off the rebel MPs over the weekend appeared to have been humiliatingly rebuffed. A fall-back position was devised whereby ministers would tell MPs that, while they could not undo the Budget, the losers from the abolition of the lowest tax band – couples or single people with no dependent children and women over 60 who have retired but are not yet drawing their pensions – could be helped in the next pre-Budget report.

Announcing the concession on BBC's Andrew Marr Show, Mr Darling said: "In future Budgets, maybe in future pre-Budget reports, I want to do more because I attach considerable importance to making sure that we help people on lower incomes.

"I want them to be able to keep as much money as they can, and that is why I intend, as I say, in future budgets, to be able to do more. What I can't do is to re-write the Budget. It isn't possible, as you go into a financial year, to unravel the whole thing and attempt to rewrite it."

Mr Darling rejected claims by some rebels that the 10p tax issue – which will raise the tax bills for people on the lowest incomes to 20 per cent – had become a defining disaster for Mr Brown just as the poll tax did for Baroness Thatcher.

But he echoed the warning by David Miliband, the Foreign Secretary, that Labour MPs risked losing the next election if they continued to revolt against Mr Brown's leadership.

"I am optimistic we can win the next election provided that ... we can show that we've got the determination to win, that we show that we can understand not only people's concerns but actually have solutions for them, we'll win. I've got every confidence in that."

The extent of government concern over another potentially damaging rebellion was revealed yesterday in a leaked "black list" of Labour MPs who oppose an extension to detention without charge for terrorist suspects. The list indicates that party whips expect 50 Labour MPs to vote against the measure by the Home Secretary, Jacqui Smith, and that at least 44 are undecided.

Fiona Mactaggart, a former minister in the Home Office, is listed as "not happy – has discussed with Jacqui – volatile". It says of Andrew Slaughter, a parliamentary private secretary at the Foreign Office: "Will support but thinks barmy".

Even supporters have their doubts. Khalid Mahmood is listed as a supporter with the caveat: "Need to watch..." Rudi Vis is listed as against, and the whips comment: "Do not think meeting Jacqui three times will make a difference".

'This is a £7bn tax grab from some of the poorest people in our society' - Vince Cable, Lib Dem MP

'Why is the Government targeting the lowest-paid people at this time?' - David Cameron, Conservative leader

'Any tax regime where the low-paid pay a higher rate than the super-rich is wrong' - Paul Kenny, GMB General Secretary

'[Mr Brown] will get a feel of how serious we are not to vote against our beliefs' - Frank Field, Labour MP