Labour to vote against 'granny tax'

Labour is preparing to mount a fresh attempt to inflict political pain on the Government over Chancellor George Osborne's Budget.

Shadow chancellor Ed Balls confirmed the party's MPs would vote against the so-called "granny tax" in the Commons debate on the Finance Bill.

Labour says the freeze on age-related allowances will cost some pensioners on relatively modest incomes up to £323 a year.

The measure was one of the most controversial elements of Mr Osborne's Budget package, however Labour's chances of victory appear slim.

On Wednesday night the Government comfortably saw off a Labour bid to reverse the cut in the top rate of income tax from 50p to 45p by 323 votes to 256.

A further move to block the imposition of VAT on hot takeaway snacks - the "pasty tax" - was also defeated despite a revolt by 14 coalition backbenchers - nine Tories and five Liberal Democrats. Attempts to prevent VAT being levied on static caravans and improvements to listed buildings met a similar fate.

Nevertheless Labour will hope that by focusing on another controversial measure they can exacerbate the Government's discomfort over the Budget.

"Today we are urging Conservative and Lib Dem MPs to join us in defeating one of the most unfair policies in this botched Budget," Mr Balls said.

"They should join Labour in standing up for pensioners in their constituencies who have worked hard all their lives by voting down the granny tax.

"How can it be right that millions of pensioners are asked to pay more so that millionaires can pay less?"