date: 11 April 2008

embargo: 00.01 hrs Saturday 12 April 2008

TUC calls for rescue package to help low-paid workers hit by new tax regime

The TUC will today (Saturday) urge the Government to introduce new measures to help the millions of low-paid workers that have lost out through the abolition of the 10p tax rate, introduced on 6 April.

In a speech to the North West TUC annual conference in Liverpool, TUC General Secretary Brendan Barber will warn that the impact of the new tax regime on low-paid workers, combined with the generous tax breaks still enjoyed by the super-rich, is causing huge resentment among ordinary workers and leading people to question the fairness of the UK tax system.

The TUC has calculated that compensating the 5.3 million workers who have lost out as a result of the abolition of the 10p tax rate would cost the Treasury approximately £550 million. The TUC believes this could easily be funded by closing a notorious tax scam currently enjoyed by the super-rich. According to TUC calculations, £550 million could be raised by preventing wealthy individuals from splitting ownership of an asset with their spouse within twelve months before sale.

Speaking at the North West TUC conference, TUC General Secretary Brendan Barber will say: 'Across the UK, people's finances are being squeezed by rising food, energy and borrowing costs. And earlier this week, millions of low-paid workers were dealt a further blow by the abolition of the 10p tax rate.

'Global economic turbulence has left the Treasury with little room for fiscal manoeuvre, but the £550 million needed to help those who have been hit hardest by this week's tax changes could easily be raised by closing a well-known tax scam.

'When it is so clear that the growing numbers of super-rich are not paying their fair share of tax, it is not surprising that average and low-earners resent any increase in their tax bills. The danger for progressive politics is that this leads people to question the fairness of our tax system, which in the longer term risks undermining the pensions, benefits and decent public services that depend on fair taxes.'

NOTES TO EDITORS:

- The TUC has estimated the cost of recovering the income for those who have lost out under the abolition of the 10p tax band by multiplying the estimated number of people who have lost out (5.3 million; Institute for Fiscal Studies) with their average loss of income (£2 a week per household; HMT evidence to the Treasury select committee).

- TUC General Secretary Brendan Barber will be addressing the North West TUC annual conference on Saturday 12 April. The conference is being held in the BT convention centre at the new ACC Liverpool, which will be the venue for the annual TUC Congress in 2009.

- All TUC press releases can be found at www.tuc.org.uk

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Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk

Press release (600 words) issued 12 Apr 2008