Darling 'to fix' 10p tax problem


Sources believe it will "fix" the political problem over 10p tax


The government is hoping a potential rebellion against the scrapping of the 10p tax band will be seen off after a Commons statement by Alistair Darling.
Sources say the statement which will set out plans to compensate those worst hit by the move will be "significant" and will "fix the political problem".
Labour whips are encouraging their MPs to listen at 1530 BST believing it will be enough to prevent a revolt.
Ex-minister Frank Field has pledged to rebel if compensation is not offered.
Government sources say plans in the chancellor's statement will be "costly" but will not require detailed work to identify the winners and losers from the 10p tax rate abolition.
'Under pressure'
The scrapping of the 10p tax rate sparked anger among Labour MPs with many fearful of its impact on next week's Crewe & Nantwich by-election.
Mr Darling has already responded to that by insisting he would "do more" in next year's Budget to help those who have lost out from the scrapping of the 10p rate.
But he has been under pressure to act now with Mr Field and a number of Labour MPs threatening to vote down this year's Budget.
The prime minister has also had to deal with poor local election results the publication of explosive memoirs by Cherie Blair John Prescott and Lord Levy and next week's crunch by-election.
On Wednesday the government will outline its "draft Queen's Speech" - the bills it intends to introduce in the next parliamentary session - and the 10p issue is also expected to be featured.
The scrapping of the lowest rate of income tax came into effect last month alongside a reduction in the basic rate of income tax from 22p to 20p and increases in child benefit and tax credits.
'Bizarre'
But it emerged that pensioners aged 60 to 64 and low earners without children were losing out as they had to pay 20p tax on that element of that bit of their pay on which they previously paid 10p tax.
Mr Darling briefed ministers on his plans at the weekly Cabinet meeting which was described as "focused business-like and determined".
It comes after a number of turbulent weeks for Gordon Brown. Mr Field told the BBC on Sunday he would be "very surprised" if Mr Brown led Labour into the next election.
That prompted Schools Secretary Ed Balls to launch a blistering attack on the ex-minister suggesting he was a loner whose motives in the 10p tax row might not be honourable. Tory leader David Cameron who says the 10p tax row will be a aaa part of their Crewe and Nantwich by-election campaign said Labour was "beginning to resemble a sort of bizarre soap opera". Lib Dem leader Nick Clegg said: "I don't want to intrude into the internal grief of the Labour party: Labour figures seem to be doing a good enough job tearing strips off each other for anyone else to contribute."

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