The PM attacked Labour for abolishing the lower tax band and has pledged to help those on more ‘modest incomes’, at yesterday’s at Prime Minister’s Questions.

This move is will appease some Tory MPs who say a move towards the 10p band will show the Conservative Party’s commitment to low income earners and will benefit struggling families.

However not all members of the Coalition welcomed this, with Lib-Dem MP David Laws ‘slapping down’ rumours later in the day, according to the Telegraph.

The 10p tax rate, abolished under Gordon Brown, will mean an extra £250 in the pockets of every taxpayer in Britain, if the first £2,500 after the personal allowance is taxed at 10p rather than the current rate of 20p.