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Minister defends new tax laws

The ten per cent tax band was scrapped yesterday - and the government will not oversee its return.

Speaking to the BBC, business secretary John Hutton said that it was "not possible" to go back on the tax reforms.

As of yesterday, the government reduced the old 22 per cent income tax rate to 20 per cent - and phased out the old ten per cent rate for lower earners.

This policy had come in for some criticism, notably from the leader of the Liberal Democrats.

"Over five million of the poorest people…are suddenly finding their starting rate of tax is doubling [so that] Gordon Brown could offer a 2p cut in the rate from 22p to 20p for the following day's headlines," Nick Clegg said.

"I think that is an outrageous political stunt at the cost of the poorest in British society."

Responding, Mr Hutton commented that Labour reforms of the past decade had ensured that many people on lower incomes - who traditionally struggle to pay off credit cards - were better off than before.

"We are talking in the worst case scenario about half a per cent of net income being the scale of the maximum loss that someone might have [due to the tax changes]," he added.

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