THE controversial granny tax was pushed through the House of Commons last night, with pensioners' groups branding it "a real betrayal of the older generation".
Today a poll showed only 24% of people supported another contentious Coalition policy – the so-called charity tax – that will cap tax relief on donations, with 55% opposed to it.
After nine Tory rebels this week opposed their own Government on the pasty tax – the slapping of VAT on hot takeaway food – and 17 rebelled on the caravan tax – putting 20% VAT on static caravans – it had been expected more would oppose the granny tax yesterday.
However, the Budget measure comfortably made its way through thanks to a 69 Coalition majority with only one Tory, Kettering MP Phillip Hollobone, voting against the Government.
The result sparked a fierce response from the National Pensioners' Convention whose general secretary Dot Gibson said the vote "will be seen by Britain's 4.5 million tax-paying pensioners as a real betrayal of the older generation".
She went on: "Many will find it astounding that the Government can ask pensioners on £11,000 to fund a tax cut for those on £150,000."
Ms Gibson made clear the campaign against the granny tax would continue and could even become an issue at the next General Election.
At Westminster, Labour had unsuccessfully appealed for Coalition backbenchers to help them derail the plans to end age-related allowances, which it estimated would cost some pensioners on relatively modest incomes up to £323 a year.
Rachel Reeves, the Shadow Chief Secretary to the Treasury, accused the Chancellor George Osborne and the Chief Secretary Danny Alexander of seeing pensioners as a "soft touch -ripe for a sneaky tax grab".
"This is yet another broken promise from the Conservatives and their Liberal Democrat friends," she told MPs during the debate on the Finance Bill.
She insisted Mr Osborne's overriding priority was not to simplify tax as suggested but "getting through his millionaires' tax break (cutting the 50p rate). He was willing to fund this by cutting the incomes of pensioners".
From next April, over-65s will have their allowances frozen at £10,500 while over-75s will have theirs frozen at £10,660 until overall tax thresholds catch up with them.
Ministers insist the move simplifies the system by bringing pensioners into line with basic rate taxpayers; it will also save the Treasury £1 billion by 2015. They also point to the £5.30 weekly boost to state pensions, which came into force earlier this month.
David Gauke, the Exchequer Secretary, told the Commons: "The idea of having the same personal allowance whether you're 64, 65 or 75 seems to me perfectly sensible."
In a separate development, a ComRes poll of 2000 people by the Charities Aid Foundation found only 24% of people disagreed when asked whether the Government should reconsider its proposal to cap tax relief for charitable donations, given the concerns raised by charities; some 55% agreed.
The Foundation claimed support for the campaign against the charity tax continued to grow with more than 1000 charities backing calls for a Coalition rethink.
Ministers want to cap the relief to stop some rich people using it to avoid paying tax but charities believe they could lose millions of pounds as philanthropists stop giving money.
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