The government has not done enough to help low earning households affected by the controversial scrapping of the 10 percent income tax band, a group of cross-party MPs said on Saturday.
The abolition, unveiled by the Labour government last year alongside a popular cut in the main income tax rate, backfired on out-of-favour Prime Minister Gordon Brown this year after concerns grew about the impact on poorer Britons.
The furore has helped further drive public opinion away from Brown in a nightmare first year in power, coming alongside the collapse of mortgage lender Northern Rock, party funding scandals, an economic downturn and rising inflation.
Chancellor Alistair Darling announced measures in May to try to compensate those worst hit by the changes - and win back some public favour - but parliament's Treasury Committee said in a report on Saturday that more help was needed.
"There are still 1.1 million losing households, many of whom are on low-incomes and who are being hit hard by rising food and fuel prices and the slowdown in the economy," said Labour MP John McFall, the chairman of the committee.
"The Government's short-term priority must be to make every effort to compensate these people in full."
Darling had to increase government borrowing by 2.7 billion pounds so he could raise personal tax allowances to help many of those affected by the abolition of the 10 percent tax band - a move cautiously praised by the committee.
"Raising personal allowances was clearly not a well-targeted way to compensate the losers from abolition, but had the merit of offering a quick solution," McFall said.
"That said, raising personal allowances is a welcome first step towards creating a simpler tax system with large number of low-income people taken out of the tax system . The government must now ensure that there is no backsliding."
