Labour revolt after Brown scraps 10p starting tax

Gordon Brown was last night facing an unprecedented Labour revolt over controversial tax rises as doubts about his leadership continued to grow.

In a series of blows to the Prime Minister, it was revealed that:

• Government minister Lord Davies has joined critics of Mr Brown's decision to scrap the 10p starting rate of income tax.

• The Labour-dominated Commons Treasury Committee will tomorrow condemn the plan as an outrageous attack on the poor.

• Mr Brown was told by a Labour MP that "people don't know who you are".

In Westminster last week, Lord Davies of Oldham – Labour's Deputy Chief Whip in the Lords – went public with his concerns over the tax changes, which are due to come into effect today.

During a debate on taxing foreign footballers, he was warned by Independent Labour peer Lord Stoddart that people were more concerned "about the taxation arrangements for poor people hurt by the withdrawal of the 10 per cent rate".

The normally scrupulously loyal Minister stunned fellow peers by replying: "I am in wholehearted agreement with the sentiment you have just expressed."

Earlier on the same day, Licensing Minister Gerry Sutcliffe attacked plans unveiled in the Budget to raise alcohol duty by 14 per cent over the next five years.

Mr Brown was also humiliated after being warned by Labour MP Chris Mole that the public do not know who he is. At the weekly meeting of the Parliamentary Labour Party, the Ipswich MP urged him to get more television coverage to boost his popularity ratings.

Challenged over his remarks, Mr Mole said he was advising Mr Brown to copy Tony Blair and go on TV shows such as Channel 4's Richard And Judy.

"I think he needs to appear not just on the formal programmes," Mr Mole added. "He also needs to get to the daytime viewers who do not necessarily watch BBC2's Newsnight."

At the same meeting, Mr Brown was roundly attacked by Labour backbenchers, furious that the decision to scrap the 10p starting rate could hit the party's core voters of poorer households and pensioners.

Last night, Labour rebels claimed the tax rows were proof of a wider lack of confidence in Mr Brown and of panic at the Tories' massive opinion poll lead over the Government.

Ian Gibson, one of more than 40 Labour MPs to raise concerns, said party whips were desperate to avoid an ambush by rebel backbenchers when the tax changes are debated in the Commons in two weeks' time. "They are bothered about it," Mr Gibson said.

"They have stopped all leave. They are worried somebody will put down an amendment saying it [the 10p rate abolition] should be reversed. The line going out from Downing Street is: 'Be loyal on this.' But can we trust that?"

Sources close to Chancellor Alistair Darling insisted that the Government would not back down over the tax changes.

"There's never been any suggestion of a policy change," he said. "It would cost between £6billion and £8billion a year to do."

Experts warn that about five million households will be worse off under the tax plans.

• The Prime Minister yesterday called for a new worldwide 'early warning system' to prevent economic and financial crises spreading across the globe. He closed a two-day meeting of Centre-Left international leaders in Watford, Hertfordshire, by demanding 'urgent' reforms to stop crises spiralling out of hand.

He told delegates: "We are facing a global financial crisis which is probably the first truly global financial crisis of the modern world. We have to reform our global financial institutions."