He got it but will they?
- 24 Apr 08, 09:25 AM
Alistair Darling will move this morning to try to clear up doubts about whether the Treasury will backdate all the compensation payments they're promising losers from scrapping the 10p tax rate. These doubts - fuelled by the chief secretary's performance on Newsnight last night (which you can watch here) - have already caused rebels who'd been won over to be roused once more.
When he faces Treasury Questions this morning, Alistair Darling will tell MPs that he meant what he wrote in his letter to the chairman of the Treasury select committee - ie that pensioners will get backdated payments whereas in the case of other groups the "average loss" will be "offset" (see the text below). In plain English, this appears to mean that pensioners are likely to get backdated winter fuel payments. In the case of low paid families, they may get increased tax credits even if they have no children. What isn't at all plain is how this can be done. Tax credits cannot, the Treasury told us yesterday, be backdated.
I suspect MPs will want some more clarification and more assurances.
Extract of letter from Alistair Darling to John McFall:
- "As a sign of the Government's intent, we do not wish to wait unnecessarily
until November. Whatever conclusions we come to, all the changes will be
backdated to the start of this financial year.
- "For other low-paid families currently outside the working tax credit system,
while we will examine in our review all practical propositions, our focus is on
potential changes to the tax credits system to allow the average losses from the
removal of the 10p starting rate of income tax to be offset."
UPDATE, 12:00PM: Below is what Alistair Darling said in the Commons. I'm not sure it moves us on much so Labour MPs will have to decide whether to trust him or whether to table an amendment obliging him to stick to the "backdating" deal they made behind the scenes.
- "I set out in a letter to the chairman of the Treasury select committee how I proposed to proceed, both in relation to a specific group - that is, people over the age of 60, between 60 and 64, whose incomes don't change that much, and for whom there is a readily available mechanism to make additional payments through the winter fuel payment. And in relation to everybody else who's affected, I said that there were certain areas that I wanted to look at, in relation to tax credits, the national minimum wage, and I said that I would be setting out proposals and return to it at the pre-Budget report. That's what I said at the weekend; that's what I said in the letter to the Treasury select committee, and the letter set out quite clearly how I intend to proceed."
UPDATE, 13:15PM: The chancellor does now seem to have reassured most on his backbenches that he will be offsetting average losses THIS YEAR - the addition of those two words may be enough to prevent this row from flaring up again.
Odd that it took so long for the Treasury to get its U-turn understood.
