Explain U-turn on aid budget, No 10 told

Downing Street attempt to quell Whitehall row over Haiti quake charity single

Gordon Brown has been challenged to explain why the Treasury tried to claw back hundreds of thousands of pounds from overseas aid money despite his promise to waive tax on a charity record for Haiti's earthquake victims.

After the disaster on the Caribbean island nation three months ago, which killed an estimated 230,000 people, a celebrity cover version of REM's "Everybody Hurts" was produced, with the Prime Minister announcing that he had decided to waive VAT on the single.

However, as The Independent revealed yesterday, a furious Whitehall row erupted when officials at the Department for International Development (DfID) were told that the Treasury was going to make them find the lost revenue by taking it from other (non-Haiti) aid projects. Sources at both departments confirmed the plan.

Aid groups were also outraged, worried about the implications for field projects on the ground, and pointed out that the public would not have expected their generosity to impact negatively on other aid projects.

Downing Street subsequently denied that this had been the plan and, following this newspaper's report, announced yesterday that no aid projects would suffer. No 10 said that DfID would initially foot the bill for the lost VAT – and that the Treasury will now have to refund it.

But in a letter to the Prime Minister yesterday, the shadow International Development Secretary, Andrew Mitchell, asked: "If there was never any intention for DfID to foot the bill for the VAT, why did the initial payment come from their budget? Why was the money not paid directly from the Treasury to the charity?"

He also demanded to know if the decision about who paid the waived VAT bill was altered after the Prime Minister learnt of The Independent's report, and if he had subsequently ordered the Treasury to pay up.

A Downing Street spokesman said yesterday: "No money raised for Haiti will be deducted from other projects or the DfID budget. DfID will reimburse the initial cost of the VAT for the single but has a written agreement with the Treasury that they will provide additional funds to offset this cost.

"This will be done in the form of additional end-of-year financing flexibility."

A DfID source had described Treasury behaviour as "a bloody cheek". The Treasury collected VAT from sales of the single, while DfID was told to reimburse the charity an equivalent amount.

The single was masterminded by Simon Cowell and sold more than 600,000 copies. Profits were split between the Disasters Emergency Committee and The Sun newspaper's Helping Haiti campaign. Cheryl Cole and Robbie Williams were among the performers who participated for free.

There has been some controversy over whether Britain should have sent a high-level observer to the island after the quake. The EU trade commissioner, Karel de Gucht, visited the islands within days of the disaster, closely followed by Hillary Clinton and France's President Nicolas Sakozy.

But the Foreign Office and DfID took the view – supported by the aid community – that the islands needed doctors and aid workers rather than political visitors. When Prince Harry offered to visit the island soon after the disaster, he was advised by civil servants not to.

Andrew Mitchell received a written invitation from the International rescue Commission in February, but cancelled the trip at the last moment after he was warned in writing by the Foreign Office that staff at the British embassy in Haiti had been told to concentrate on relief work rather than prioritise shepherding him about.

Mike Foster, the junior minister at DfID, eventually visited the island last month. While he was there, he announced that Britain's total contribution to the relief operation had reached £150m – £91m donated by the public, and £59m from the Government.

A UN donors conference in New York this week saw countries and NGOs pledge to raise $10bn (£6.5bn) to aid Haiti's reconstruction over the next three years, although such promises do not always materialise in full.

Suggested Topics
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Sport
David Moyes and Louis van Gaal
football
News
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
A cabin crew member photographed the devastation after one flight
news
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
Life and Style
food + drink
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
News
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Life and Style
Sexual health charities have campaigned for the kits to be regulated
healthAmerican woman who did tells parents there is 'nothing to be afraid of'
Life and Style
fashion
Arts and Entertainment
The John Peel Lecture has previously been given by Pete Townshend of The Who, Billy Bragg and Charlotte Church
musicGodfather of punk will speak on 'free music in a capitalist society'
News
peopleAt least it's for a worthwhile cause
News
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
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

Pharmaceutical Computer System Validation Specialist

£300 - £350 Per Day: Clearwater People Solutions Ltd: Pharmaceutical Computer ...

High Level Teaching Assistant (HTLA)

£70 - £90 per day: Randstad Education Birmingham: Higher Level Teaching Assist...

Teaching Assistant

£50 - £80 per day: Randstad Education Birmingham: Randstad Education is the UK...

Senior Java Developer - API's / Webservices - XML, XSLT

£400 - £450 Per Day: Clearwater People Solutions Ltd: Our client is currently ...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments