Brown's 'U-Turn' On Tax Rate?

Plans to help casualties of the abolition of the 10p tax rate have been met with raucous criticism in the Commons today.

During Question Time session, Prime Minister Gordon Brown defended his plans to compensate pensioners and childless people on low incomes.

Tory leader David Cameron reproached the Prime Minister accusing him of "dithering" and "indecision".

In what is seen as a 'U-turn', Chancellor Alistair Darling is now to set out a compensation deal, which will be unveiled in the autumn and backdated to April.

Mr Brown said in a heated argument among party leaders: "Everyone now agrees that the 10p rate isn't the best way of tackling poverty.

"The point is to have economic growth in this country, that gets more people into work."

Mr Darling has outlined his proposals in a letter to John McFall, the Labour Chairman of the Commons Treasury Select Committee.

An extract of the letter said: "For pensioners aged 60-64, whose incomes tend to be more stable, we have put in hard work to see if those households who have lost out from the removal of the 10p starting rate of income tax can be helped through the mechanism that already exists to pay the Winter Fuel Allowance."

Labour backbenchers rebelling against the tax changes had threatened to oppose the Government unless a solution was reached that would compensate those hardest hit.

(DS)