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Last Updated: Thursday, 22 March 2007, 17:03 GMT
Brown denies Budget 'con trick'
Gordon Brown

Chancellor Gordon Brown has rejected Conservative claims his Budget tax changes amounted to a "con trick".

Mr Brown cut 2p off the basic tax rate, but he also axed the 10p starter rate, and changed the National Insurance limits, leaving some people worse off.

The Tories said lower earners would pay more income tax, while the Lib Dems say "the poor are subsidising the rich".

But Mr Brown said the reforms had simplified the system and were "in the best interests of the country".

BUDGET HIGHLIGHTS
2p off basic rate of income tax
10p starter rate abolished
2p cut in corporation tax
Gas guzzling car duty up to 300 this year and 400 next
Beer and cider up 1p, wine 5p, spirits duty frozen
11p on cigarettes
2p petrol increase frozen for six months
More cash for schools and hospitals

He told BBC Breakfast the average family would be 5 a week better off as a result of the income tax changes.

He denied lower paid workers would be worse off: "For people who are lower earners the tax credit wipes out the income tax liability and that's why lower income workers are better off now as a result of what we have done as a government."

Asked about allegations by ex-colleague Lord Turnbull that he has "Stalinist" tendencies, Mr Brown said some civil servants had been upset by "difficult decisions" he had made, such as keeping Britain out of the euro.

"If you take difficult decisions and you are prepared to see them through, you are not going to please everybody all the time," he told BBC Radio 4's Today.

But he said he did not "hold grudges against people" and simply wanted to "get on with the job".

There are winners but there are also millions of losers
Shadow chancellor George Osborne

On Wednesday, in his eleventh Budget, Mr Brown announced the basic income tax rate would be cut to 20p, its lowest rate for 75 years, from April 2008.

The Budget is expected to be Mr Brown's last as chancellor, as he is the favourite to succeed Tony Blair as prime minister within the next few months.

It was seen by some as a set-piece statement, setting the stage for his anticipated takeover at Downing Street.

'Not fairer'

But Shadow Chancellor George Osborne described it as a "con trick", hitting low earners.

"Their income tax bill went up yesterday and I don't think listening to that Budget they would have thought that," he told BBC Radio 4's Today programme.

WINNERS AND LOSERS
Anyone earning between about 17,000 and 40,000 a year will be better off
Those earning less than about 17,000 will lose from the abolition of the 10p tax rate but they should more than claw it back from working tax credit
Those on 43,000 will pay 20 a year more in tax
All figures for 2008. Source: PriceWaterhouseCoopers

He challenged Mr Brown to admit his Budget will leave 3.5 million families worse off.

"There are winners but there are also millions of losers. There are 3.5 million families that are worse off," he said.

Lib Dem Treasury spokesman Vince Cable said: "An awful lot of people are not going to come out of this much better, it's not necessarily any fairer."

He said low paid workers would be hit "quite badly", particularly if they were single, and tax credits were not the answer as they were a "means-tested benefit" which was "complicated" and often did not work.

The Institute for Fiscal Studies said millions of people would benefit - including those earning between 18,500 and 39,000 a year - amounting to about 40% of households.

But the IFS said about 2m people on lower wages - such as single people with no children earning between 12,000 and 18,500 would lose out, as they would be harder hit by the abolition of the 10p starting rate.

SNP leader Alex Salmond said: "I think the disappointing thing is, if he was going for a huge reduction in tax, then he should have gone for council tax which is the one that's so unfair and oppressing so many people across the country."

Plaid Cymru MP Adam Price said the chancellor had done nothing to help poor families in Wales.


VIDEO AND AUDIO NEWS
Gordon Brown defends his tax plans



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