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Stuart will sponsor rebel move against 10p tax plan
Apr 22 2008 By Jonathan Walker, Political Editor
Birmingham Labour MP Gisela Stuart is to demand compensation for millions of workers left worse off by the Government's tax reforms, when she sponsors rebel proposals in a crunch Commons vote.
Ms Stuart, MP for Edgbaston, vowed to continue her opposition to the reforms after Alistair Darling, the Chancellor, ruled out quick concessions for hard-hit low earners.
She will sponsor a rebel amendment when the Commons next month debates the Government's decision to abolish the 10p starting rate of income tax.
Mr Darling attempted to head off a major rebellion from Labour backbenchers over the weekend, when he dropped hints that his next Budget in 2009 would "revisit" the issue.
Last night ministers also promised a review into what more the Government could do to reduce poverty, but it appeared this would not be enough to win over Labour MPs who are angry that the reforms appear to help people on reasonable salaries at the expense of the poorest.
Scrapping the starting tax rate allowed the Government to cut the basic rate of income tax from 22p to 20p. It means people earning more than about £18,000 may pay less tax in total, but those earning less may be worse off.
Gordon Brown, the Prime Minister, last night urged backbenchers to remain loyal in the run-up to local elections on May 1, when he spoke to MPs at a meeting of the Parliamentary Labour Party.
Labour whips are also set to hold a series of one-to-one meetings with potential rebels in the run-up to the vote next Monday.
But Ms Stuart said she was not impressed with promises of future changes.
She is to sponsor an amendment along with former Welfare Minister Frank Field which would provide compensation to those hit by the changes. She said: "Our proposal is that people on low incomes who are paying more tax should receive compensation.
"It would help people this financial year, when the tax changes come in, instead of making them wait a year."
Birmingham MP Richard Burden (Lab Northfield) also urged the Government to act quickly.
However, Mr Darling has won over one Birmingham MP who had earlier expressed concern. Sion Simon (Lab Erdington) said: "We can't try to rewrite the Budget now. I would urge colleagues who are going down that route to take a more considered approach."
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