Local MP Michael Connarty stands firm and wins compensation for 10p tax band losses

After several meetings with the Prime Minister, the Parliamentary Labour Party and the Labour Back Bench Treasury Committee of which Michael Connarty MP is a member, the Government accepted they had got their calculations wrong and therefore must compensate people, and that compensation must be back dated to make up for any losses in the earlier part of the tax year.

Michael said, “Sometimes you have to just stand firm on your principals. I did not ask to be elected to Parliament to cut the incomes of the less well off members of society to give tax cuts to the better off. The 50 Labour Members who signed the Amendment were quite firm in our resolve that only a full compensation package properly back dated to cover any losses suffered in this financial year, would be acceptable to us. I see it as a mark of the strength and moral position of the Prime Minister, Gordon Brown, that he was willing to accept that the Treasury had not worked through the full consequences of the decision to abolish the 10p tax rate and that the correct moral thing to do was to promise full back dated compensation for those on low incomes who had not been given other compensation through the tax system, child benefit, allowances or pensions. The reduction in the standard rate of tax to 20p and the other changes in the Budget mean that 4 out of 5 people are better off and I am happy to support that now poorer members of society are not having to lose out as a consequence. I am particularly pleased that the Government have responded to my personal suggestion that we look at changes to the minimum wage for young workers. I think the full minimum wage should be paid to everyone who is 18 years and over”.