10p tax losers ‘need more help’
June 28, 2008
Alistair Darling must do more to help the 1.1m low-income households still losing out as a result of the scrapping of the 10p tax rate, MPs have said.
A £2.7bn emergency package announced by the chancellor last month did not go far enough, the cross-party Commons Treasury committee said in a report.
The money had not been “well-targeted”, with £2bn going to middle-income workers who had not lost out, it added.
Mr Darling has said he wants to do more to help those not already compensated.
The committee’s report said the chancellor’s decision to raise the income tax threshold by £600 in May, at a cost of £2.7bn, was “probably the least bad option” to mitigate the impact of the abolition of the 10p rate.
It found the 5.3m losers from the initial decision were people on low incomes for whom the loss of up to £232 a year had dealt a “significant” blow to their finances.
This, it noted, came at a time of sharply rising prices for essential goods and services.
Some people were still estimated to be up to £112 a year worse off, the report said.
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