10p tax repair
Stand by for the announcement of the Treasury's 10p tax repair. The word from Whitehall is that it will be "significant", "costly" and will "fix the political problem".
The chancellor's been determined to come up with a package that does not involve individual payments to individually identified losers, does not fall apart under scrutiny and which can be presented as a long-term policy rather than a short-term fix. He has also insisted that he will not unveil his plans in full until all the details are worked out ie in his pre-Budget report in the autumn.
Long term, Alistair Darling knows he needs to re-establish Labour's narrative of helping "the many not the few" with a strategy of help for the poorest - via winter fuel payments, the minimum wage and even, possibly, changes to tax allowances.
Today's statement is being described as a "ground clearing" job so that the list of bills the PM will unveil tomorrow get a hearing.
PS. When listening to arguments about gainers and losers, bear in the mind the following:
The Treasury estimates that 5.3million people lost as a result of the abolition of the 10p tax rate.
When the prime minister claimed recently that the figure "came down as a result of the Budget 2007 to 4.3m, it is now going down again to 3.8m" (Sky News, 5 May 2008) he was taking into account other measures in the last two Budgets such as the rise in winter fuel allowance and the planned up-rating of tax credits and child benefit".
The Treasury states that "for households that are worse off, the average loss is about £2 per week" and the "maximum amount any single individual could be worse off by is £232 per year (£4.46 per week).
UPDATE, 03:30PM: It is to be increases in tax allowances which will affect pay packets from September and will be paid for by greater borrowing.