Philip Webster
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Emergency one-off payments to low-paid workers who lost out from the abolition of the 10p tax rate are about to be announced by Alistair Darling, The Times has learnt.
The Chancellor is rushing forward an announcement on how he intends eventually to compensate those who have lost out.
He will tell MPs that the scheme will take some time to work out and to identify all the losers — people in the £12,000 to £18,000 salary range.
But he and Gordon Brown have decided to announce short-term help for those known to have lost out after accepting that the issue has caused massive damage to Labour and the Prime Minister’s reputation.
Details of the short-term plan were not known last night but the announcement could come this afternoon.
The move emerged after Mr Brown’s closest ally, Ed Balls, warned that Labour had to act swiftly to restore its reputation as the defender of family finances after the “mistake” over the abolition of the 10p rate.
Labour rebels have given warning that the Government could be defeated on the Finance Bill unless it comes forward with a satisfactory package.
Ministers have already assured the other main group to have lost out — women pensioners aged between 60 and 64 — that they will be helped through winter fuel payments.
Ministers accept that the move is unlikely to be enough to turn the tide in the Crewe by-election, where the Tories have been installed as runaway favourites. But they believe that swift and substantial action is needed to give Labour any chance of recovery.
Mr Balls told an education briefing: “The reality is we have got behind the curve on the issue of family finances and we need to reestablish that pretty quickly. The 10p tax issue is the most important thing to sort out.”
He also accused Frank Field of acting dishonourably.
Mr Field, the former welfare minister who spearheaded the 10p tax revolt by backbenchers, had predicted in a BBC World Service interview, repeated on the Today programme yesterday morning, that Mr Brown would not lead Labour into the next election.
He said that Mr Brown was “tragically” unhappy in his job. “I would be very surprised if he’s still the leader of the Labour Party [in two years time] and therefore leading us into the election campaign,” he said.
Mr Balls said that Mr Brown and Mr Darling had been right to engage with Mr Field over the 10p rate
He said: “I think people could look at what he was saying a few weeks ago and believe at that time that his intentions were honourable. As for what he said this morning I think I leave you to draw your own conclusions.
“I think it is very unlikely on the basis of what I have seen that Frank Field will support any proposals that are brought forward by Government on the 10p tax.”
Mr Balls, the Schools Secretary, was speaking at a briefing called before the final stages in the Commons of the Bill that raises the age for leaving education and training to 18.
He said that if the credit crunch’s impact on families had been anticipated different decisions would have been taken. His implied criticism of the Pre-Budget Report may ruffle feathers at the Treasury.
His intervention shows frustration within the Brown camp.
Asked about Mr Field’s advice that Mr Brown should consult his close family and friends about his future, Mr Balls said: “I’d be surprised if the Prime Minister will be taking Frank Field’s advice generally.
“We have all known Frank for many years, and I think he used to work on his own when he was in opposition. He used to work on his own on the back benches. I think he used to work on his own when he was a minister as well.”
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Why don't Brown, Balls and the rest realise that it's too late to make amends. The very fact that such a policy could have been allowed to get into a socialist budget confirms the complete disregard this administration has for the vulnerable.
A.Williams, Cradley Heath,
Frank Field is a very honourable man, who thinks carefully before he speaks in public. He stands up for the ordinary person which is more than can be said for this government. Thank goodness there are people like Frank Field in parliament who challenge poor, ill-thought out policies.
G. Akehurst, Southampton, Hampshire
Helen, you say, "He'll be the only one left with a job come the election!"
I agree with your sentiment, but more likely he will be de-selected. Nulabour trucks no dissent.
John East, Scunthorpe, Lincs.
Has there ever been a man more appropriately named than Edd Balls ! His name says it all.
Martin Briggs, Heversham, England
Oh my ,the Brown camp are frustrated.
Has HMS Doomed any other crew left apart from the man Balls
(lacking his usual supercilious grin).
How dare this upstart sleight a man who entered politcs to be, and remain a socialist.
What is Balls for, apart from being a euphemism for this Government.
robert everitt, wolverhampton,
Pensioners over 65 whose income is under £20.000 also loose out because because the 10p rate of tax has been abolished, even so the Personal Allowence has increased. On £14800 the loss is £111p.a.
K Lamb, Chalfont, Bucks
Why did I pay in to a private pension? Why did I ever think I would be able to retire in comfort? Why has this government been so rotten to me and my wife? I ask the question because my wife and I are retired, we have been disabled from childhood struggling through life. Let the thunb screws loose !
R Marks, Broadstairs,
Incredulous, Will this apply every year from now on? Why not just reinstate the tax band or increase the tax free allowance. This desperate rushed out measure seems to be a half cocked election bribe that the public will see through! Low earners will have to struggle with filling in forms I guess!
Ian, Bristol,
Mike, Alicante, Spain
is certainly correct in saying the only way to correct the losses is to bring back the 10p rate and alter the others. Anything else will simply be a fudge, or rather an arduous and long application which they hope either people wont know about or can't be bothered to complete!
James, Leeds,
It is a con that only certain groups are affected. There is no age discrimination on this - is you earn you lose out up to £18,000 per year wage band in varying amounts and has been rightly posted the lower end lose to the tune of £200 regardless of age.
Janet Wood, Penrith, UK
So, they are doing a U turn on corporate tax, the 10p, the non-dom... so where is he now going to find the taxes needed?
I fear the worst.
Reg, Newbury, Uk
Compensation is announced.
jane, Whittlesey, Uk
Dishonourable = all those MPs who backed this measure until they realised their jobs were on the line. I realised after about 5 seconds that scrapping the 10p rate would hit those on low incomes, how came it's taken Ed Balls 15 months?
Jason White, Paris,
Frank Fields would do well to transfer to the conservatives.
They would be kinder to the less well off than the bunch of hooray Henry champagne socialists he is currently involved with.
As for the Balls family on £600000 a year salary and expenses, well I won't listen to them about tory toffs.
rob, derby, uk
Mr Field cannot be playing for his own career, I can see no way Labour can win the next general election. It'll be another 20 years before they get back power after dumbing down the poor and allowing the rich to get much richer. Hand-outs don't mean happy people and votes! Honest thoughts welcome!
Alistair Kipling, Birmingham,
Why is this such a big deal? Those worst hit by this will pay an extra 10% on the first £2k (approx) of earnings ie about £200 pa or around £4 a week. What's that, a packet of cigarettes, a couple of pints?
For once this has helped those on middle incomes who normally bear the brunt of tax reforms!
Jon Dawkins, Bristol, UK
Just how many days and months is it to the next due election.
I need to set up a calender so that I can cross off the days one by one til we get there.
Janet Wood, Penrith, UK
I agree with Dan from Oxford. We now have a benefits culture working through the middle-class due to Brown's complex tax and benefits system - to make us all dependant on the state. This rush-through compensation should be seen for what it is - to buy off Brown's political problems. Appalling.
Mac, Barcelona, Spain
Mr Balls said: Id be surprised if the Prime Minister will be taking Frank Fields advice generally. So What! If it wasn't for Mr. Field, Mr.Brown would have got away with his scam. This Government has shown unequivocally that they really don't care. The have the gall to use the term "Tory toffs"
Peter, Brixham, Devon
What about the people from personal allowance (from c. £5k) up to £12,000. Often the least well off of those affected. This is a complete overcomplicated shambles designed not to recompense all those who lose out but to provide uneasy backbenchers some cover from rightfully angry voters.
Kevin, Leeds,
Does this bumch of idiots have the faintest idea what they are doing.... Oops! Sorry! it is the Labour Party. Of course they don't!
Peter, London,
The 10p tax was a stunt when they introduced it anyway. They could have achieved the same thing at less cost by just raising the tax codes. But this didn't have enough spin value obviously. If they had done that, they could have let inflation eat it away. I feel sorry for their it dept - in out in.
jeremy, hassocks, sussex
I can't wait for the next General Election Night Special - the coffee maker will be set to maximum strength, a list of reputable all-night pizza delivery services will be to hand - as we all enjoy one Portillo moment after the other. Perhaps even Gordon Brown's constituents might provide the best..
kirsanov, cardiff,
Darling says, only some will be compensated..for the shambles that is Labour under Gordon Browns rule.we could all claim Tax Credits another one off Browns ideas, with an alarming error rate, Winter fuel paymnets, people are loosing out every week so why ! ,do they have to wait for compensation
Robert, Bristol,
I'm a single woman pensioner who turned 60 last October, and I'm not entitled to the winter fuel payment because my birthday was two weeks too late. It's a stupid way to make a repayment of tax, the only equitable way to refund tax is through the tax system.
CMB, Milton Keynes,
Ed Balls seems to have lost his "Precious". Might I suggest he starts his search in the same cave that he inhabited before starting his political career.
Edwin, Bucharest,
Why not allow people to keep more of their own, earned money instead of 'compensating' them through a complex, costly and difficult to administer system? Could it be to ensure more public sector jobs and that a benefit- dependant electorate continue to vote NuLabour?
DanOxford, Oxford, England
To quote from your article:-
"............to identify all the losers people in the £12,000 to £18,000 salary range."
This is NOT ACCURATE. For single people under 65, those receiving £7635 lose the most, and the loss tapers off until around £18K, when it turns into a gain.
Percy, Dorset, UK
Those whom the Gods wish to distroy they first make mad!!
Dewi
david e smith, colwyn Bay, conwy
What a nasty piece of work Balls ( so what ) is. No scruples just naked ambition. Good riddance to him and Brown. They've been found out.
Paul Wilson, Brighton,
Balls was Browns top man at the treasury when they decided to wreck the UK Pensions. Frank Field is one of the very few in the Labour party who can be trusted and will be elected come the next general election unlike Balls and Brown who will both definitely lose their seats.
D Case, Nwqquay,
By the time they pay people to work out who gets what back, to administer the payout, and all the other associated costs of the government doing anything these days (consultants fees, contracts with big profits built in, four-star hotels, meals, car hire, etc...), the change will COST them money!
Miss Dee, Tayside, UK
I lost out from the 10p tax rate - I earn small amounts as a part-timer with 3 young kids, one under 2. I have to work for us to survive, but as my husband works, instead of scrounging off the state, we will get nothing back, as our overall income will be deemed too high.
Where's our compensation?
Caroline , London, England
Dishonourable?! These cabinet ministers would be doing nothing if it wasn't for Frank Field daring to stand on the side of his constituents. He'll be the only one left with a job come the election!
Helen, Oxford,
I agree that Frank Field is one of those few labour MPs of integrity.
Brown and cronies have however got precisely what they want out of this affair: the 10p rate has gone, and, whatever the replacement is called, it is another form of means testing and thus fits Brown's brand of socialism.
Michael, London, UK
Acting dishonourably?
Since when has it been dishonourable to tell the plain and simple truth?
...and to think that MPs are hoping for a 15% pay rise at this very moment, paid for in part from this doubling of tax on the lowest paid. Truly, that beggars belief.
Sean, Surrey, UK
RM of London is so right about Balls and Cooper. These two have already chosen the wallpaper and china for N0.10. To see their dream evaporate so quickly must be excruciating, but for many, a great delight! I bet they are not repeating that repulsive "So What?" expression now! Hee, hee.
Peter Ellis, Calpe, Spain
Hmm, I seem to slip thorough these measures as well! My solution will be to not declare any earnings outside my very small company pension. Stuff 'em!
Steve, Bideford,
How dare the Balls man accuse one of the few remaining honourable politicians of anything?
This disgusting man squirreled away in the treasury team and is undoubtedly the author of many a stealth tax!
They simply don't get it do they?
Jim, Prudhoe, England
The only guarantee here is that many people will still lose out whatever Darling does and as far as he is concerned, tough. The only way to ensure no one loses out is to bring back the 10p rate or increase the 20p threshold but Darling/Brown will not do that.
Mike, Alicante, Spain
Compared to Mp's salaries and expenses these people are poor.
steve tea, manchester, cheshire
I've been hit by the 10p tax and even if it's resolved today I would never vote for Labour again. I have seen all major services in my area close down since 1997 but the biggest thing that sticks in my craw if the blatant lying from Ministers almost every day about crime, unemployment, immigration.
Roger, Surrey,
Well Balls talks balls. Frank Field is worth 100 jumped up career politicans who are work witht he crowd and walk on each other when they see a chance to advance their worthless little careers.
Julian Williams, Narberth, Wales
Frank Field is my MP and although I am conservative by conviction I always vote for Frank Field in Birkenhead at General Elections because I consider him to be one of the most honourable and honest men in politics. I have had many years of being helped in many areas by Frank Field
kate Stansfield, Birkenhead, Wirral
Balls and Cooper, the so-called ' Golden Couple' in Brown's disastrous Cabinet can sense everything slipping away under their chum Gordon. Their desperation is now palpable.
RM, London, England