‘The abolition of the 10p tax rate has dealt a body blow to millions of low paid workers,’ UNISON General Secretary, Dave Prentis said yesterday.
The leader of the 1,350,000-strong public sector workers’ union was speaking as it emerged that the Brown government could face defeat on the issue in the House of Commons next Monday.
Forty Labour MPs have signed up to vote for an amendment from right-wing Labour MP Frank Field calling for a package of compensation to be put in place for the 5.3 million low paid workers who will lose out, before parliament officially sanctions the abolition of the 10p rate.
If the government loses the Finance Bill vote, just three days before local elections in England and Wales and mayoral elections in London on Thursday, May 1st, it would be seen as a vote of no confidence in the Brown premiership.
Referring to Treasury Secretary Yvette Cooper’s pledge on Monday to look at the issue, Prentis, who is speaking at the Scottish TUC in Inverness today, continued: ‘A review that kicks the problem into the long grass is not good enough.
‘These workers need to be compensated now. They are opening pay slips now and finding that they are up to £15 a month worse off.
‘They are the ones who can least afford to lose money. They are already reeling from energy and food price hikes, and the cost of borrowing.’
Concluding, Prentis said: ‘The government is imposing an extra tax burden on the low paid, while allowing the rich to get away with their tax avoidance schemes.’
The abolition of the 10p tax rate was announced by Brown when Chancellor in November 2006.
The House of Commons Treasury committee has said single people with no children earning under £18,500 will lose £232 a year as a result of the changes.
A PCS civil servants union spokesman told News Line yesterday: ‘Not only are our members facing cuts in pay, they are facing the double whammy of the abolition of the 10p tax rate.
‘100,000 of our members are on strike on Thursday against the government’s insistence to cap public sector pay to below inflation.
‘The government need to start recognising that it has to start paying its workforce a fair, decent wage to stem mounting anger.’
Brown told MPs at an emergency meeting of the Parliamentary Labour Party on Monday: ‘We can’t have a budget defeated’ and Chief Whip Geoff Hoon warned that a vote against the bill would amount to a vote of no confidence in the government.
But Field, the Labour MP and former minister heading the revolt, said 40 Labour MPs had signed his amendment.
One of them, Clive Betts MP said: ‘I’m concerned about the people who have lost out and are now paying £6 or £8 a week extra tax.’
Lynne Gilroy MP for Plymouth Sutton said: ‘I inherited the poorest ward in England from my Conservative predecessor.’
She warned: ‘The damage this is doing is to people who are on low incomes who feel that for some reason they do not matter so much, but I think they matter and I just don’t want some people who are really struggling to make ends meet to feel they don’t matter so much.’
Dr Ian Gibson MP warned: ‘Pay packets are going out now with money removed from them and people don’t feel that the government is representing them.’
Pendle Labour MP Gordon Prentice said: ‘The fact is that if the Budget goes down, if this key clause goes down, then I don’t think the government can survive.’