Chancellor Gordon Brown announced cuts in the rate of income tax in the Budget, which was released on Wednesday afternoon.
From next year, the basic rate of income tax will now be 20 pence in the pound, down from the current rate of 22 pence.
“This was the time to make the tax reform that helps incentives work, does more for families and is very sensitive to the needs of pensioners,” Mr Brown told GMTV.
Opposition leaders have been quick to critics the new tax measures, however, as they also remove the provision for taxing only ten pence in the pound on the first £2,150 of taxable income.
Conservative leader David Cameron called the new measure “a con” and described the reform to the tax system as “smoke and mirrors”.
Liberal Democrat leader Menzies Campbell was similarly unimpressed, lambasting the chancellor for introducing a “cut for the wealthy dressed up as a tax cut for the poor”.
“Those on low incomes will now experience even higher rates of taxation and this will do nothing to increase incentives to work,” he said.
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