British finance minister Gordon Brown today denied accusations that tax cuts in his 11th and most likely last budget disguised measures that could leave millions of Britons worse off.
Potentially voter-friendly cuts to income and corporation tax stunned opposition politicians and were met with cheers from the ruling Labour party in the budget yesterday.
But critics said scrapping a lower band of income tax and raising small company taxes wiped out any benefits. They argued the budget was designed to dupe Britons into thinking they would pay less tax.
"That's absolute nonsense," Mr Brown told Sky. "On average, it's £100 per household better off. It's a major reform in a fiscally neutral budget." The chancellor said increases to tax credits for families would help offset any effect from ending the 10 percent income tax band.
Middle earners are also expected to benefit from the cut in headline income tax to 20 per cent from 22 per cent. The government says small companies might face higher taxes but will also gain from other incentives built into the budget.
But Conservative economic spokesman George Osborne argued millions would be worse off following the scrapping of the 10 per cent band of income tax which Mr Brown himself introduced to help lower earners.
Mr Brown is almost certain to take over from Prime Minister Tony Blair in the coming months and will face the tough task of wooing voters back to a Labour party growing increasingly unpopular over Iraq, public services and party funding scandals.