Cameron mocks the Prime Minister's 'panic concessions' as the Government gives in to Labour's 10p tax rebels

13 April 2012

Gordon Brown was accused of a "massive loss of authority" today after a humiliating climbdown over the scrapping of the 10p income tax rate.

Rebel Labour MPs forced the Prime Minister to perform an embarrassing U-turn to head off a threatened backbench revolt.

He pledged to compensate an estimated 5.3million pensioners and low-paid childless people who lost money when the bottom income tax band was axed.

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David Cameron savaged Gordon Brown in the Commons today, claiming he cut a 'pathetic figure' and had performed a U-turn to save his own skin

Chancellor Alistair Darling met a crucial rebel demand by promising that financial help for those affected would be back-dated to the start of this financial year.

He also said he was considering changing the winter fuel payment system, tax credits and the minimum wage to offset the impact of the unpopular tax change, estimated to cost the worst hit up to £4 a week.

Unveiling his plan in a letter to Treasury Select Committee chairman John McFall, Mr Darling said details of the new support package will be announced in the Pre-Budget Report this autumn.

Labour's Frank Field greeted the climbdown by withdrawing an amendment to the Finance Bill - backed by 46 Labour MPs - calling for compensation for those who would lose out.

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The Tory leader accused Mr Brown of giving 'panic concessions' to offset the tax row

The Prime Minister managed a smile despite the attack on his leadership

Mr Field said: "It is terrific news for our constituents who earn modest wages and salaries and for Labour MPs who have been actively supporting their campaign.

"The Government has listened, and more importantly acted upon what many Labour MPs have been saying."

Speaking afterwards to Sky News, he praised Gordon Brown for his "transformation", saying: "What we have seen is a Government not only listening but acting and I very much welcome that.

"I also think this is a transformation of the Prime Minister from the one the media have been so critical of to one who is prepared to listen.

"I think it is a very good day for people on low pay but also a good day for the Government."

Rebel backbenchers had threatened to scupper Mr Brown's final Budget in a vote on Monday - threatening him with political catastrophe.

At a heated Prime Minister's Questions, Tory leader David Cameron said the "panic concessions" represented a "massive loss of authority" for Mr Brown who he claimed cut a "pathetic figure".

He told the Commons: "No apology. No admission of guilt. Just a U-turn to try and save your skin.

"Doesn't this climbdown tell us all we need to know about this Government. It's always about politics, not policy; calculation, not about conviction.

"It's always about your self-interest, not the national interest. Do you think your reputation can ever recover?"

Former minister Frank Field withdrew his amendment after Alistair Darling promised to compensate the worst affected

He said: "The central issue is your massive loss of authority. Was there ever anything more humiliating than a Prime Minister breaking off talks with the (US) President, asking for an outside line in the White House to beg one of your PPS's not to resign?

"This is what Labour MPs are saying about you: 'He's losing touch.' 'He doesn't know what fairness is.' 'He needs to see the world through the eyes of voters.' 'He's like a scared rabbit in the headlights.'

"The Labour peer Lord Desai said your leadership style is like 'porridge'. Another week like this and it will be Cheerios! The Labour Party has finally worked out that they've got a loser not a leader."

Liberal Democrat leader Nick Clegg continued the taunting, telling Mr Brown: "The truth is that under your Government, income inequality is rising, working age poverty is up and now you are doubling the tax rate for the lowest earners."

Observing that Mr Brown "used to be a man of principle", he told the House: "If he can't delivery on poverty, what on earth is the point of this increasingly pointless Prime Minister?"

Before today's climbdown, Mr Darling had earlier insisted he could not simply unpick the decision made in Mr Brown's final Budget as Chancellor last year, which would cost an estimated £7 billion.

With a majority of 67, the Prime Minister had faced potential defeat on the key piece of legislation to implement the Budget in next week's vote.

Those worst affected included workers paid less than £18,000 with no children who could lose up to £3-£4 a week.

Mr Brown resorted to giving address to the Parliamentary Labour Party on Monday night in a bid to head off the rebellion.

He also announced a review of measures to help the childless poor.

Mr Darling had offered to introduce a compensation package in the November Pre-Budget Report that will apply in this financial year.

It could involve increased help through the tax credit system or an increase in tax allowances to take those affected out of tax altogether.

Treasury sources said the details were still being worked out and all options were being considered.

The Commons Treasury Select Committee is to investigate the impact of scrapping the 10p rate on Britain's poorest households.

Its report is expected this summer and could be used by MPs as an excuse to put off a damaging vote by giving the Government time to respond.

Senior sources said that if the amendment were passed, it would "drive a coach and horses through the Budget and could bring down the Government.

Cutbacks: Miss Shaw

THE PENSIONER WHO'LL LOSE £20 A MONTH

Former company director Lynn Shaw will be £20 a month worse off.

Miss Shaw, 63, who retired at 60, has a total pension of just £10,594 - £6,206 from the state and £4,388 from a private pension.

She says the loss of £240 a year means she will have to to cut back on water use, heating and even the amount and quality of food she eats.

"Pensioners are some of the worst off people in the country and it is disgusting that they are being asked to pay more tax," she added.

"This might not seem a lot of money to many but for a pensioner it is a huge amount.

"They are taking money from those can't afford it and giving it to those who can."

Miss Shaw, of Wigan, said: "The amount of money I am losing every year is more than my water bill.

"I have worked since I was 15, never claimed benefits, not a single penny, and not needed hospital care.

"I have never been a drain on the state.

"Gordon Brown is picking on the wrong people."

Hard up: Mr Antoniw

THE PR WORKER FACING A MOUNTAIN OF DEBT

Tom Antoniw, 21, fears the tax change will push him deeper into debt as struggles to make ends meet on his £17,000 salary.

He is £10,000 in debt after quitting university two years into a degree in medicine and can barely pay his rent each month.

"A week after I am paid I usually run out of money," he said.

"Then I have to use my overdraft and my credit card.

"At the moment I am paying around £200 each month in tax.

"I can't afford to pay more. The 10p tax rate cut will just put me into further debt."

On top of loan repayments, the public relations worker, who lives in Bethnal Green, East London, £650 a month in rent and bills, £100 on transport and £40 on mobile phone bills and the same on gym membership.

He said: "Increasing taxes for those on lower incomes is disgusting.

"The Government should be increasing the taxes of high earners.

"It's completely against what Labour have always pledged they stood for.

"I have always been a big Labour supporter but I will never vote for them again.

"They are robbing us blind."

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