Tuesday May 13, 11:56 AM
UK's Darling to make statement on compensation for losers on 10p tax abolition
LONDON (Thomson Financial) - Chancellor of Exchequer Alistair Darling will today make a parliamentary statement on the 'latest thinking' on a compensation package for people who stand to lose out from the abolition of the 10 pence tax rate, said Prime Minister Gordon Brown's spokesman, Michael Ellam
He told reporters this morning that the statement will not contain full details of any package as these are still being worked out, and should be announced in the pre-Budget report expected towards the end of this year.
Ellam said this afternoon's statement will flesh out the thinking on the ways to compensate low-income earners with no children and pensioners in the 60-64 age bracket who do not receive tax credits, which would mitigate the effects of the abolition of the rate.
The government had to move towards a compensation package to head off a backbench rebellion by Labour MPs who threatened to overturn the move in the House of Commons during the second reading of the Finance Bill, which enacts measures introduced in the budget.
The 10 pence tax rate was part of an hour-long discussion on the broader state of the economy, which looked at the effects of today's jump in inflation combined with rising food and fuel prices and a fall in house prices.
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