Tax package 'may break debt rule'

Economic experts are questioning the impact of Chancellor Alistair Darling's surprise announcement of £2.7 billion to compensate people who lost out from the abolition of the 10p income tax rate.

Some commentators suggested that the extra borrowing to fund increases in personal tax allowances could force the Chancellor to breach his own fiscal rule that national debt should stay below 40% of GDP.

And others calculated that the bulk of the money promised by Mr Darling would not go to the low-paid workers worst hit by the loss of the 10p rate, but to middle-income earners.

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