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Labour rebel numbers growing over income tax changes

22/04/2008

Nearly 40 Labour backbenchers have signed an amendment challenging the government on its income tax changes.

Former minister Frank Field is expected to table an amendment calling for compensation for those who are worse off as the result of the abolition of the 10p starter rate of income tax.

According to his Westminster office nearly 40 Labour backbenchers have signed the amendment, meaning the government faces the real prospect of a defeat on the issue.

Last night the finance bill passed its second reading stage by 298 votes to 223 but it will return to the Commons floor when MPs will consider the bill next Monday afternoon.

Mr Field will submit his amendment then, meaning government whips have six days to win over those who are angry about the decision to scrap the 10p income tax band.

A failure to do so could result in a major parliamentary defeat for Mr Brown's government, as both the Conservatives and Liberal Democrats have pledged to back Mr Field's amendment when it comes to the vote.

Chief secretary to the Treasury Yvette Cooper argued in parliament yesterday those negatively affected by the tax band changes were still £500 a week on average better off than they had been under the Conservative personal tax regime of 1997.

But, as Labour backbencher Gisela Stuart explained on the Today programme this morning, many of her colleagues are still seeking "assurances" that the tax system changes are not seeing the poorest "punished".

"We're in a very strange situation that this isn't a rebellion as you usually have rebellions," she said.

"We really don't want to vote against the government, but we do want to protect the poorest and particularly those who are in work and are doing all the things we as a government have asked them to."