Parliamentary Commissions of Inquiry — New Clause 1 — Implementation of section 1 — 7 Jul 2009 at 19:00

The majority rejected an amendment to the Finance Bill 2009 that sought to ensure that the lowest paid would not be worse off as a result of the abolition of the 10p starting rate for income tax.

The abolition of the 10p rate for the lowest earners had been first announced in the 2007 budget, along with a surprise 2p cut in the basic rate of income tax to 20p in the pound but there was continuing concern that this would severely effect those on the lowest incomes. (See here for more detail).

Frank Field, the Labour MP who rebelled by tabling the amendment, argued that this situation increased the tax burden on the lowest paid whilst easing it for the more affluent. The amendment would have meant that these changes to the starting rate and the basic rate of income tax could not come into effect until:

the Chancellor of the Exchequer lays before Parliament a statement that, in his opinion, measures have been taken to ensure that no person is worse off by reason of the person's income not being sufficient to secure that the effect of the abolition of the 10p starting rate has been entirely offset by the reduction of the basic rate.

Debate in Parliament | Source |