10p Tax Row Rumbles On

Rebel Labour MPs are preparing to muster backbench support in a bid to block the entire Budget, in protest at the decision to scrap the 10p bottom rate of income tax.

Prime Minister Gordon Brown is likely to face-down a fresh revolt over the contentious 2007 tax policy.

Labour's Frank Field and Greg Pope said they would attempt to block the Budget in the Commons today, after both the Conservatives and Lib Dems backed an amendment brought forward by the MPs.

Opponents to the tax sanction claim millions of people on low income are now worse off.

According to rebels, around 30 Labour backbenchers have pledged to vote against the government.

Mr Brown has defended actions taken to support those affected by the policy.

A spokesman for the Prime Minister told BBC News: "The government believes that we have set out the best and most affordable way of providing support to lower and middle income households."

The spokesman would not be drawn on the suggestion many have not benefited from the tax change.

The decision to raise the starting rate of tax to 20p in the pound formed part of Mr Brown's last Budget as Chancellor.

It came into force in April last year - in addition to a reduced basic rate of tax from 22% to 20%.

Several concession were made early last year, in a government attempt to appease those suffering most.

Around 1.3 million have lost almost £1 per week since the new taxation policy was introduced, opponents have said.

Lib Dem Treasury spokesman Vince Cable said: "This is a situation that Gordon Brown has made even worse, despite the temporary measures he brought in to try to fix a problem of his own making."

(PR/JM)