1.1 million still losing out in Chancellors by-election budget

10.00.00pm BST (GMT +0100) Tue 13th May 2008

Local Liberal Democrat Parliamentary Candidate for Northampton North constituency Andrew Simpson has accused the Government of panicking over plans to tackle the 10p tax cut fiasco by rushing in measures

"Clearly this action has been driven more by panic over the prospect of Labour losing the Crewe and Nantwich by-election than by a clearly thought out policy. This is illustrated by the fact that this u-turn still leaves 1.1 million of the lowest paid workers losing up to £100 each."

"It also questions the actions of our Northampton Labour MP who claimed to be consulting people on the impact of the 10p tax cut yet cannot have done this adequately to influence the decision."

"This leaves you with no confidence that this Labour Government knows what it is doing"

Ends

Notes to Editors:

1. Even after today's announcement, 1.1 million people earning between just over £6,500 and £12,800 will still lose out under Labour's doubling of the 10p rate.

2. Of the 1.1 million people losing under Labour's current plans, some will still lose up to £100 per year.

3. Of the £2.7bn spent on increasing the personal allowance, only around £630m - less than a quarter - will actually go to the 5.3 million people who lost out under the 10p rate, making it an extremely poorly targeted policy.

4. This additional spending will mean that net government borrowing for this year will rise to £45.7bn, a 6% increase from what was predicted two months ago and a 50% increase from what was estimated just one year ago.