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U-turn confirmed

Nick Robinson | 11:33 UK time, Wednesday, 23 April 2008

In a significant government U-turn, the government is now promising to compensate those pensioners and young people who have lost money as a result of the abolition of the 10p tax rate.

In a written statement to the Commons, the chancellor makes clear that the Treasury will assess the average loss of pensioners aged between 60 and 64 and childless working people before announcing what he will do in his pre-Budget report this autumn. He also makes clear that whatever measures are taken will be backdated to the beginning of the tax year.

Comments

  • Comment number 1.

    In China, reverse gear is just another way of going forwards.

    All Hail Blessed Leader!

  • Comment number 2.

    What an utter fiasco. There is clearly no grip on crucial policy implications by the Chancellor. Does nobody cary out an impact analysis of these things? I trust that the rebels will not be bought off by this shambolic exercise.

  • Comment number 3.

    So lets look at that

    No actual promise of repayment

    and then any rewew linked to

    winter fuel payment ( nothing to do with this .. that is about stopping people freezing!)

    tax credits ( not relevant to young childless people and should be replaced by not taking the tax in the first place! )

    minimum wage ( As usual darling passing the buck onto industry to pick up the cost of his complete and utter shambles )

    Lets hope the Election is soon so we can get rid of this poor chancellor along with the fake PM!

  • Comment number 4.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 5.

    Can I be compensated for all the tax rises under this government, please..?
    Well - what's the difference..??

  • Comment number 6.

    What about people with no children and on early retirement?

  • Comment number 7.

    When the tories were criticising this we were told that cancelling it would cost £7 billion. As we are now being asked to believe anyone losing out will be compensated, can we assume that this is an unfunded, uncosted £7 billion tax cut.

    Whenever the tories mention any tax plan, new labour scream that it is uncosted and that they will have to slash public service and sack every nurse in the country to pay for it. Does the same apply to this unfunded tax cut or am I missing something?

  • Comment number 8.

    As always, they still don't understand the basic problem that most people who are entitled to tax credits (or other credits) don't claim them (especially the self-employed who never know how much they'll be earning from month to month).

    Their "fix" is almost as bad as the original con of doubling the rate from 10% to 20% (they didn't abolish the 10p rate, I wish you journalists at the bbc would stop saying that; what they did was double it).

    They may have bought-off some of the labour rebels, but in the real world they've bought off absolutely none of the electorate who can see through this kind of scam and the lies that Gordon Brown keeps perpetrating about "helping" the low paid.

  • Comment number 9.

    And the next U-turn will be the 42 day detention rule, I confidently predict; utterly groundless policy.

    If governments enacted everything the police asked for, half the polpulation would be behind bars awaiting questioning. The police are a fine institution doing a difficult job but they work for us and not the other way around.

    This government will now go backwards in everything until they call an election as none of their backbenchers are confident of returning after an election; this is the truth of what Brown has delivered - a pointless, leaderless administration.

    Congratulations to the Blessed Ditherer.

  • Comment number 10.

    Backtracking to go forward is like a nose in an overcoat!

  • Comment number 11.

    This is certainly embarrasing for the government, but its also rather comforting - parliament doing its job. It's nice to see a group of backbenchers a) reacting to their constituents and b) being listened to by their ministerial colleagues. It's a shame the Treasury officials couldn't have done a better job to start with...

  • Comment number 12.

    This is of no help for people with bills to pay NOW who are paying tens or hundreds of pounds a week extra tax. A rebate at some time in the future and tax credits etc. are of no use to them. And with inflation at 5+% in the real world any "compensation" is being eroded every day.

    The Government and MPs have had a year plus to work out this would be a fiasco, have they no brains?

    When they announced the 10 p tax rate they said it would help millions. How they didn't realise that taking it away (doubling the tax rate for those affected to 20p) would be the same logic harm millions is beyond me. Or was it a cynical calculation that they could get away with it?

    And Nick and colleagues (Preson, Davis et al) what were you saying about this a year ago? Anything?

  • Comment number 13.

    I dont know why when the government shifts it's stance to an unpopular move they are criticized. Surely this is what a representative democracy is all about! If they didn't it would be more of a concern..

  • Comment number 14.

    Nick

    I just heard you on R4 - you didn't seem quite so sure that it was a U-Turn.

    In fact you reeled off a list of why it wasn't a u-turn.

    You also seemed to go out of your way to state (apparantly unprompted) that the government were more interested in 'doing the right thing' than losing face.

    If you were just reporting that that is the impression that Labour want to portray, and you were not presenting it as 'fact' or your personal oppinion then you did not make that at all clear.

  • Comment number 15.

    "Backdated to the beginning of the tax year" - 2009 ?

  • Comment number 16.

    Yes, what about the early retired with no children? How will I be compensated?
    Can you find out please Nick?

  • Comment number 17.

    "Whenever the tories mention any tax plan, new labour scream that it is uncosted and that they will have to slash public service and sack every nurse in the country to pay for it. Does the same apply to this unfunded tax cut or am I missing something?"

    The above quote shows the subtlety of the Labour Plan

    The proposed remedy as they may be applied will cost them little

    If the raise the minimum wage for youngsters the problem is borne by business and ultimately by ourselves.

    Credit where credit is due he has push the problem from their working class supporters to the middle class and business. Only problem was the 22p to 20p reduction was a pre-election to try and halt the opinion polls

    Labour resort back to the "old labour" days of blaming everyone else!

  • Comment number 18.

    This is not a U-turn the Government are just buy some time. It will be a review in the Autumn and then they will mention tax credits which people with have to apply for. As we know most people do not apply for and the form will be pages long so or incorrect. I would say if people do they will not get any relief until April 2009. I think that tax in the UK is very taxing and complicated and this is going to make it more so.

    What I do not understand is why MP's have taken so long to complain, I have been since it was put in the budget of 2007. I think, that for all the people who wanted a Labour government in 1997 this proves that we never had one. To tax part timers and pensioners in this way is shocking. I gave up my Labour membership in 1998 when the Labour Government decided to allow tuition fees.

  • Comment number 19.

    Is this from the same government book of promises, that includes a referendum on the EU ? Any promises this government makes are not worth a penny, as they never deliver on them. I just wish that all the people that must have voted for them, remember all of the broken promises and either vote for somone else, or abstain from voting if they cannot bring themselves to vote for another party.

  • Comment number 20.

    We don't have children, but do work long hours, pay lots of tax and national insurance. My partner is now worse off following the 10p rate cut. Following the goverment website for tax credits, it states that we are eligible for a Working Tax Credit of £ 0.00 . Like many things in this once great country, we all seem to be paying for and receiving nothing. I think the 10p rate should be reinstated, and to save the government the money it would supposedly cost, make all benegit claimants carry out community work to earn their allowances and benefits. Obviously, some would be unable to work due to disabilities, etc, but the great majority of those on things such as jobseekers allowance are more than capable.

  • Comment number 21.

    I'm one of the people the abolition of the 10p rate affects. I am also what would traditionally be regarded as Labour voting fodder.

    I am not the slightest bit interested in any budget announcement in the autumn, nor any back-dated promise for next April.

    I want my money back and I want it now. You do not get my vote until I get in my hand, adjusted for inflation, all the extra money you are going to take off me over the next 12 months.

    I hate to say this - especially as I have voted Labour for 40 years, but I would rather have that witch Thatcher running the shop than Shrek Brown.

    I have absolutely no intention of supporting this New Labour rubbish anymore. It's a complete sham. If I want a tory government I'll vote for a tory.

  • Comment number 22.

    Is anyone really better off after the Budget? I thought I might have been until I realised the National Insurance banding had altered. I now pay £10.00 less tax but £10.00 more National Insurance.
    Whoopeee!!!!!!!!!!!!!

  • Comment number 23.

    "Jam tomorrow" from the Chancellor to recompense the UK poor from "pain today" caused by the reneging on the 10p tax band.

    Looks like Blair wasn't the only one in Downing Street to "get religion"!

  • Comment number 24.

    I am a disabled widow, unable to work, and I know of other people in my situation. How does he plan to compensate us. We get no winter fuel payments or qualify for tax credits. Have we got to pay the price for savings of the rich.

  • Comment number 25.

    It just show the incompetence of PM Brown and Chancellor Darling's management of this 10p tax proposal and implementation.

    They should have think about the implications to all the people affected and not just one section of the society to gain votes.

    To say now they are listening to the backbenchers and is willing to U turn is a tax on the general publics' intelligence.

    How embarrassing it is to the outside world!! Where is PM Brown's authority.

    On another subject, the current oil worker strike on pension rights for their sons and daughters is ridiculous. The world is changing and no one can guarantee jobs are available for live. There may not even be an oil industry in years to come. The strike will only cause hardship to the community at large.

  • Comment number 26.

    The chancellor talks of compensating 60 to 64 year olds ! what about over 65s, can anybody tell me his policy on them please.

  • Comment number 27.

    ......

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