PM 'betrayed poor' with 10p tax move

Nick Clegg has described the compensation package for those hit by the abolition of the 10p tax band as "a complete charade".

The Liberal Democrat leader claimed that the poorest people are paying for Gordon Brown's "incompetence" and called on the prime minister to "come back to this House with specific proposals to compensate in full the million people he has betrayed".

Chancellor Alistair Darling said yesterday that the personal tax allowance would be increased by £600, meaning that 22 million people on low or middle wages would gain an extra £120 this year.

But speaking during prime minister's questions on Wednesday, Clegg said: "The government pretends to have solved the 10p problem when it hasn't.

"The Conservatives only seem to be concerned about the effect on their chances in the by-election.

"How can they all ignore the fact that even after yesterday's announcement over a million of the poorest people in this country are still worse off. Don't they matter?"

Brown told MPs it was important to remember that "every person in the country who is an income tax payer at the basic rate is receiving £120".

He claimed that the government had taken 600,000 children out of poverty, and would help a further 300,000, as well as a million pensioners.

"No government has a better record at tackling poverty than this government," he said, adding that "no liberal policy would ever have achieved that".

But Clegg said: "The fact remains that under a Labour government the worst paid are worse off. Why do they have to pay for his incompetence?"

Cameron

Conservative leader David Cameron accused the prime minister of timing the chancellor's announcement to help the government before next Thursday's by-election in Crewe and Nantwich, which the Tories hope to take from Labour.

"Yesterday we all paid £2.7bn to keep the prime minister in his job. The least he can do is earn it by answering some questions," he said.

Brown said that the compensation proposals had to be brought forward now if they were to be included in the Finance Bill, which brings the government's tax proposals into law.

"I thought the Conservative Party would welcome our announcement that 22 million people have benefited, but they have not even told us whether they support our plans."

The prime minister went on to say that Conservative priorities were to cut inheritance tax and stamp duty on shares, and "giving money to those who are already rich".

Cameron replied: "The cancelled election had nothing to do with the polls, and the announcement yesterday had nothing to do with the by-election.

"Another day, another complete failure to be straight with people."