Brown returns to face 10p tax row
 

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Prime Minister Gordon Brown is returning to the UK amid mounting protests within the Labour Party at his decision to scrap the 10p tax rate.

He is reported to be "furious" that the row overshadowed his trip to the US.

Five ministerial aides have called on him to help 5.3 million low-paid workers who have lost out as a result of the changes.

The Treasury has denied reports the chancellor is preparing a climbdown over the abolition of the 10p tax band.

The Daily Telegraph says Treasury officials are working on plans to compensate low-earning workers without children who are losing money, following the scrapping of the 10p rate.

The change means that people who would have paid income tax at the lowest, introductory 10% rate will now have to pay the 20% rate.

Under a range of changes which came fully into force in the new tax year, child benefits, state pensions and tax credits have all gone up.

But the Commons Treasury Select committee has said that childless single people earning under £18,500 will lose up to £232 a year.

'Watch this space'

On BBC Radio 4's Any Questions, Treasury Secretary Angela Eagle said people should "watch this space" when she was asked if the government was planning any measures to compensate for the tax changes.

But a Treasury spokesman later told the BBC there was no thought of "an imminent change to the policy".

He said the chancellor was aware of people's concerns and in future "would take them into account".

Mr Brown is understood to believe the row has been exaggerated by the media and has urged Labour MPs to look at the government's overall tax changes, which he says have helped low-paid families.

On Thursday Mr Brown took time out of his official US visit to telephone ministerial aide Angela Smith and persuade her not to quit over the issue.

One of five other ministerial aides who protested - MP David Anderson - told the Evening Standard on Friday that Labour should not be "making poor people poorer" while at the same time cutting inheritance tax for the better off.

Stephen Pound, parliamentary private secretary to Employment Minister Stephen Timms, told Channel 4 News on Friday the tax issue had become "corrosive" and there was a "groundswell" of opinion about it.

But Schools Secretary Ed Balls called for an end to the public row in an interview in Friday's Times.

He said: "The efforts of local councillors and shadow leaders should not be undermined by this kind of indulgent nonsense."

MPs will get a chance to vote on the 10p tax issue the week after next, when ex-minister Frank Field plans to table an amendment to the Finance Bill calling for compensation for those affected.

The row has been seized by the opposition as a sign Mr Brown is losing control of his own party.