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Brown Defeats Rebellion in U.K. Parliament on U.K. Tax Policy

By Gonzalo Vina and Robert Hutton

July 7 (Bloomberg) -- Prime Minister Gordon Brown fought off an attempt to derail the U.K. government’s annual budget, defeating a rebellion from lawmakers in his own party calling for more help for poor workers hurt by a tax change.

The House of Commons voted 268-311 to reject an amendment to the Finance Bill that would have stymied tax collection efforts until Chancellor of the Exchequer Alistair Darling could certify that nobody will be worse off because of the policy.

Former Social Security Minister Frank Field wanted fresh concessions from the government to soften the impact of Brown’s decision in 2007 to abolish the 10 percent tax bracket, forced the workers on the lowest incomes to pay more tax.

“We find ourselves for the first time with increasing the tax burden on lower earners and made tax easier for people like me,” Field said in Parliament before the vote.

Darling last year shaved 2.7 billion pounds ($4.4 billion) off tax bills for Britain’s 22 million workers to fend off a rebellion caused by the decision to abolish the starting rate of tax.

A defeat today would have been an embarrassment for Brown, who trails the Conservative opposition in polls less than a year before the election. The government has a 63 majority in the 646-seat House of Commons and Field said yesterday 30 Labour rebels and opposition parties would back him.

“He was right to raise the matter,” Treasury Minister Stephen Timms said in Parliament before the vote. “Our response has been fair and straight forward. We are happy to continue to look at those, but halting the collection of income tax is not the answer.”

To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net;

Last Updated: July 7, 2009 14:20 EDT

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