Budget could be blocked by group of rebel Labour MPs

Gordon Brown is facing a new backbench revolt over his decision to scrap the 10p bottom rate of income tax as Labour MPs threaten to block this year's entire Budget.

A dozen Labour MPs have backed an amendment to the Finance Bill, which includes the measures in the April Budget, saying they cannot take effect until there is full compensation for all 3.5 million people who lost out when the 10p in the pound rate was abolished last year.

Although a previous rebellion was headed off when the Government announced a compensation package last year, its leaders now regret their decision to back down because 500,000 low income households will be left worse off permanently. They are planning "one last push" to win full redress for the losers when the Bill is debated in the Commons next week.

The revolt could pose another threat to Mr Brown's authority. The decision on 10p tax was included in his last Budget as Chancellor in 2007, when he also cut the basic rate of tax from 22p to 20p in the pound. The 10p move returned to haunt him and Tories branded the package "a tax con, not a tax cut."

Labour rebels are confident of winning cross-party support. If they do, they would require 32 Labour MPs to vote against the Government to ensure full compensation or scupper the Budget. Earlier this year, 42 of them signed a Commons motion demanding help for all those who lost out.

The Chancellor, Alistair Darling, is likely to resist the call because of the parlous state of the public finances. He has already made permanent the changes to tax allowances which will reduce the number left worse off from 1.1 million households at present to 500,000 by 2011-12.

Frank Field, who has tabled the amendment with former Labour whip Greg Pope, told The Independent: "If enough Labour members show resolve, then all the 3.5 million losers from the 10p decision will at last get justice. Most of them are Labour voters; 3.5 million people is half the Labour vote at the 2005 election. So MPs can vote to save their seats."

Mr Field said he was wrong to accept assurances from the Government last year that the problem would be sorted out: "The time for warm words is over; I shan't fall for that trick again."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
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

Sales Consultant – Permanent – West Sussex – £24-£25k plus commission and other benefits

£24000 - £25000 Per Annum plus company car and commission: Clearwater People S...

SEN Teaching Assistant

£45 - £65 per day: Randstad Education Bristol: Supply SEN Support Jobs in Bris...

SEN Teaching Assistant

£45 - £60 per day: Randstad Education Bristol: Supply SEN Support Jobs in Glou...

Humanities and Economics Teacher - January 2015 - Malaysia

£18000 - £20400 per annum + Accommodation, Flights, Medical Cover: Randstad Ed...

Day In a Page

Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes
Independent writers remember their Saturday jobs:

Independent writers remember their Saturday jobs

"I have never regarded anything I have done in "the media" as a proper job"
Lyricist Richard Thomas shares his 11-step recipe for creating a hit West End musical

11-step recipe for creating a West End hit

Richard Thomas, the lyricist behind the Jerry Springer and Anna Nicole Smith operas, explains how Bob Dylan, 'Breaking Bad' and even Noam Chomsky inspired his songbook for the new musical 'Made in Dagenham'
Tonke Dragt's The Letter for the King has finally been translated into English ... 50 years on

Buried treasure: The Letter for the King

The coming-of-age tale about a boy and his mission to save a mythical kingdom has sold a million copies since it was written by an eccentric Dutchwoman in 1962. Yet until last year, no one had read it in English
Can instilling a sense of entrepreneurship in pupils have a positive effect on their learning?

The school that means business

Richard Garner heads to Lancashire, where developing the 'dragons' of the future is also helping one community academy to achieve its educational goals
10 best tablets

The world in your pocket: 10 best tablets

They’re thin, they’re light, you can use them for work on the move or keeping entertained
Lutz Pfannenstiel: The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents

Lutz Pfannenstiel interview

The goalkeeper who gave up Bayern Munich for the Crazy Gang, Bradford and a whirlwind trawl across continents
Pete Jenson: Popular Jürgen Klopp can reignite Borussia Dortmund’s season with visit to Bayern Munich

Pete Jenson's a Different League

Popular Klopp can reignite Dortmund’s season with visit to Bayern
John Cantlie video proves that Isis expects victory in Kobani

Cantlie video proves that Isis expects victory in Kobani

The use of the British hostage demonstrates once again the militants' skill and originality in conducting a propaganda war, says Patrick Cockburn
The killer instinct: The man who helps students spot potential murderers

The killer instinct

Phil Chalmers travels the US warning students how to spot possible future murderers, but can his contentious methods really stop the bloodshed?
Clothing the gap: A new exhibition celebrates women who stood apart from the fashion herd

Clothing the gap

A new exhibition celebrates women who stood apart from the fashion herd
Fall of the Berlin Wall: Goodbye to all that - the lost world beyond the Iron Curtain

The Fall of the Berlin Wall

Goodbye to all that - the lost world beyond the Iron Curtain