Commenting on the Chancellor's plans to compensate low paid workers who lost out when the 10p income tax rate was abolished, Liberal Democrat Shadow Chancellor, Vince Cable said:

"This Government's tax policy has descended into a complete farce.

"The abolition of the 10p rate was designed to help Labour win the election that never was. Now this by-election budget is designed to help them cling on to Crewe in next week's vote.

"The Chancellor is desperately trying to backtrack from the disastrous decisions of the Prime Minister but has still hasn't managed to get it right. This u-turn leaves 1.1 million of the lowest paid workers losing up to £100 each.

"We can have no confidence in either a Prime Minister or a Chancellor who continue to make tax policy on the hoof, while still leaving the poorest out in the cold."