Government defeats income tax revolt

LONDON (Reuters) - Prime Minister Gordon Brown beat off a rebellion by some members of his Labour party Tuesday over changes to income tax that hit the low-paid.

Brown appeared to face the prospect of a humiliating parliamentary defeat over demands that the government do more to compensate low-paid workers who lost out through Brown's abolition in 2007 of the lowest income tax rate.

But intensive lobbying by the government and warnings that the measure, if approved, could stop the government collecting income tax appeared to have made Labour MPs fall into line.

In the end, the government comfortably won the vote.

The leading Labour rebel on the issue, Frank Field, said Labour MPs had been put in the position of advocating a measure which increased the tax burden on the lower paid.

"It cried in the face of our understanding of what Labour is about -- being on the side of the poor," he told parliament.

Labour MPs fear that anger among low-paid workers at the tax rise, at a time when they are suffering through a severe recession, could rebound on Labour at the next national election, due within 11 months.

Brown has already been weakened by a party revolt last month and trails the Conservatives in opinion polls.

Stephen Timms, financial secretary to the Treasury, said the rebel amendment would cause chaos. "The clause, if agreed, would mean that without some rather desperate measures ... we would be unable to collect income tax this year. Income tax already collected would have to be repaid," he said.