UK government faces new row over tax

Date: 1st July 2008

The UK government is facing a renewed challenge in relation to the ending of the current 10p band on tax.

However, in response to this potential attack from MPs within the Labour Party, the chancellor had earlier announced details of a compensation package worth a total of £2.7 billion.

The package has since faced criticism from the Commons Treasury select committee.

"We will be looking, when we debate this in the Commons and when the government promises it will come back in November, for a proper settlement for everyone who lost out on 10p," said Frank Field, a backbench member of the Labour Party who led the attack against the move, in a report by the BBC.

As there are a number of individuals who would not be covered by the chancellor's support package, an amendment to the Finance Bill has been tabled - it is not expected to pass, according to the broadcaster's report.

The policy to remove the 10p tax band was initially announced earlier this year.