Reading West MP Martin Salter has welcomed the statement made today in the House of Commons by Chancellor of the Exchequer Alistair Darling announcing compensation for those disadvantaged by the repeal of the 10p tax rate.

The statement sets out an increase of the personal tax allowance by £600 to £6035 for this financial year, benefiting all basic rate taxpayers under 65. This will mean that 22 million people on low and middle incomes will gain an additional £120 this year to offset their average loss from the repeal of the lower rate of tax. 

Speaking from Westminster Mr Salter said:

“As I pointed out in the letter I wrote to the Chancellor in April, the groups most affected by the repeal of the 10p rate were early retirees on low company pensions, young single people in low paid employment and part-time workers with no children who do not qualify for tax credits. I am delighted that today’s statement offers a straightforward, practical solution to compensate the vast majority of people in those groups.”

He added:

“I was deeply unhappy with the effect of the repeal on some of my less well-off constituents in Reading West and whilst I understand the need to simplify the tax system, there were some serious unintended consequences of this policy. Today’s announcement shows that parliamentary pressure can produce results and that the government is big enough to admit its mistakes and take action to restore help for those who need it the most.”