Taxing times.

Despite the media coverage, there has been a distinct lack of comment about the loss of the 10p starting rate of tax from the beginning of the fiscal year during my canvassing.

One or 2 of my team have had the odd comment, but my only encounter on the doorstep was more of an analysis of the likely effects of the cut. I am more likely to be faced with the anti-Iraq War comments and the continued dissatisfaction of Blair's term as PM.

Since the cut was announced by Gordon Brown in the 2007 Budget, I been following the views of Frank Field, the outspoken MP for Birkenhead, with interest.

His website carries an article that was published in Sunday's "News of the World".

He states that "No Labour MP wants to wreck the Budget. Most of us were overjoyed that Gordon Brown’s last Budget cut the middle rate of tax from 22p to 20p in the pound. What none of us agreed with was that the tax cuts should be paid for by the poorest workers. 5.3 million households are made worse off by the abolition of the 10p rate of tax."

He understands that it is not realistic to campaign to re-instate the 10p rate, such a move would wreck the Budget and the higher paid would be the biggest beneficiaries. They would gain both advantages of the 10p rate and the cut in the 22p rate. This would cost £7 billion and that kind of money simply isn’t available.

His plan is to press the Government to introduce a compensation package for those millions of workers who have begun to loose out. Such a package would not help the highest paid, but would direct every penny available for cash payments to lower paid workers.

Mr Field has tabled an amendment to the clause in the Budget Bill that gives the Government the retrospective authority to abolish the 10p rate. The amendment is nothing but simple. It denies the Government the power to abolish the 10p rate until it has published a compensatory package. The package has then to be approved by the Commons before the Budget’s 10p abolition. Here is a double lock to protect the low paid.

He feels that "lower paid workers not only object to paying for tax cuts, they rightly feel it is unfair. But they also feel devalued and hurt by the Government...The 10p cut strikes the heart of why many of us are in politics which is about helping those worse off."

Next week's vote on the Budget, and hopefully Frank Field's amendment will be an interesting time, coming as it does 4 days ahead of the elections.

The Telegraph notes that it is highly unusual for the backbench MPs of the governing party to defeat the Treasury over a key aspect of the Budget, especially something as important as income tax policy. it states "Frank Field’s proposed amendment to the Finance Bill either to reverse the 10p tax abolition or compensate the five million low-paid workers who will lose out promises to be one of those rare moments."

But while it is rare, there is a precedent for backbenchers forcing a major Budget change.
In 1977, Denis Healey’s Budget failed to uprate tax allowances in line with what was then rampant inflation. Supported by Nigel Lawson, the Tory finance spokesman, two Labour backbenchers, Jeff Rooker and Audrey Wise, forced through an amendment to the Finance Bill at 3am.

On the Today Programme on Radio 4 yesterday, Shadow Chancellor, George Osbourne, would neither confirm of deny whether the Tories would support the amendment.

So there is the real possibility of a Government defeat days before the local elections...will this help or hinder my chances?