Brown set to soften middle class attack

...while Sarah's interest rate rises

GORDON Brown will delay for at least a year plans for taxing child benefit in his Budget tomorrow after intervention by Tony Blair to ease the expected pounds 1bn squeeze on the middle classes who helped to give Labour its landslide victory last May.

The Prime Minister spent Friday at Chequers going through the Chancellor's Budget plans and informed sources have told The Independent that he personally watered down some of Mr Brown's proposals to avoid alienating the middle classes.

"Tony is a moderator and they spent Friday with Gordon's enthusiasm for radical change being overridden by Tony's political nous," said the Government source.

Mr Brown will boost spending on health and education, but will reinforce his reputation as the "Iron Chancellor" today by announcing legislation requiring more openness from the Treasury in future about spending and taxation calculations.

Petrol, cigarettes and alcohol will all be hit by big hikes in duty by the Chancellor, with an expected 27p on a gallon fuel as part of a "green" and health agenda. But the new green taxes on motorists and the green belt, including car parking at out-of-town supermarkets, will be delayed for 12 months.

There will be an pounds 80m boost for the arts, with pounds 40m to scrap charges at the Victoria & Albert museum, the Imperial War museum, and the National Maritime and Science museums.

Taxing child benefit for those on the 40 per cent higher rate of income tax could go ahead next year to finance a pounds 700m increase in spending on measures to reduce unemployment and poverty. Mr Brown has also had his sights on scrapping mortgage tax relief, which he has reduced to 10 per cent, in spite of Mr Blair's fears about upsetting the middle classes.

The centrepiece of the Budget will be the pounds 1bn Working Families Tax Credit, to be introduced in April next year, at the same time as taxing child benefit with an uprating to sweeten the pill. Childcare Credit will replace Family Credit to help low-income families by making sure work pays, but it will not be as generous as recent reports suggested, leaving Harriet Harman, the Secretary of State for Social Security, with a tough job in selling the package. The moves will have a mixed affect with childcare costs; The Independent is campaigning for a tax allowance for all working mothers to help with childcare.

The Bishop of Liverpool, the Rt Rev James Jones, warned the Chancellor against forcing mothers to work. "We must recognise parenting is work," he said.

Mr Brown has long had child benefit in his sights, but Baroness Castle, the veteran Labour campaigner, and John Edmonds, the union leader, who will today lead a mass lobby of Parliament to defend the welfare state both warned that it could hit women who are now taxed separately. The new low-starting rate of income tax of 10p in the pound for the low paid will be announced for next year.

Today Mr Brown will set out plans to bind himself and successors to prudent fiscal policies, making sure future governments are legally required to set out clear rules for tax and spending policies and stick to them with a "Code for Fiscal Stability". He is determined to make sure no government can play fast and loose with taxpayers' money.

Clauses in the Finance Bill following tomorrow's Budget will form the legal basis for a code requiring every government to publish its own fiscal rules and supporting documentation. The fiscal code will be based on five principles: transparency, economic stability, responsible tax and spending policies, fairness and efficiency. According to a source in the Treasury: "For too long fiscal policy has been conducted behind closed doors."

Life and Style
Customers can get their caffeine fix on the move
food + drink
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
News
newsChester Zoo have revealed their newest members
Sport
sportLeague Managers' Association had described Malky Mackay texts as 'friendly banter'
Life and Style
fashion
Arts and Entertainment
tvSpielberg involved in bringing his 2002 film to the small screen
News
peopleCareer spanned 70 years, including work with Holocaust survivors
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Hydrographic Survey Manager

£40000 - £50000 Per Annum: The Green Recruitment Company: The Green Recruitmen...

Structural Engineer

Competitive: The Green Recruitment Company: Job Title: Structural Engineer Job...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Head of IT (Not-for-Profit sector) - East Sussex

£45000 - £50000 per annum + 5 weeks holiday & benefits: Ashdown Group: Head of...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape