Darling's emergency 10p tax bail out

CHANCELLOR Alistair Darling has announced higher personal tax allowances in an attempt bail out the Government from the political mess his predecessor Gordon Brown landed it in when he scrapped the 10p starting band for income tax.

Graham Dines

CHANCELLOR Alistair Darling has announced higher personal tax allowances in an attempt bail out the Government from the political mess his predecessor Gordon Brown landed it in when he scrapped the 10p starting band for income tax.

He is to borrow £2.7 billion to help low paid workers by raising the individual personal tax allowances for this year by £600.

Under the measure, to be included in the Finance Bill currently going through Parliament, 22 million people on low and middle incomes will gain £120 a year, backdate to the beginning of April.

Mr Darling's announcement was greeted with cheers by Labour MPs, nervous at the implications of the 10p tax starting rate abolition for Labour's chances in next week's Crewe and Nantwich by-election.

Government are panicking in the face of the Crewe and Nantwich by-election.'

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However, Britain's biggest pensioner organisation, the National Pensioners Convention (NPC), has criticised the Chancellor's proposed package of compensation for those aged under 65, as too little, too late to win back the support of older voters.

Joe Harris, NPC general secretary said: “under the old system, a pensioner aged 60-64 with an income of £10,000 a year would have had an annual tax bill of £782. Even with Mr Darling's extra £600, the same pensioner will pay £793 in tax - still leaving them £11 worse off.

“This panic measure is too little too late and won't be enough to win back the trust and support of Britain's older voters. That can only come when the government agrees to raise the basic state pension substantially and restore its link with earnings.”

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