Brown set for male tax revolt

The Treasury is braced for a 'male backlash' against the Budget over changes which will transfer tax credit money from husbands to their wives.

Sources close to Downing Street have admitted to concerns over working men opening their pay packets in April to find they appear to have 'lost' hundreds of pounds.

The family payment will have shifted to their wives' bank accounts, under changes reflecting that women are considered more likely to spend the cash on children. But fears that up to 200,000 working men will resent the loss of control - or confuse it with the national insurance rise due on 6 April - have prompted a national advertising campaign to explain the change.

"The worry is that a lot of men are not going to like this, even though their families are still getting the money," said one senior Labour source.

The Treasury is considering placing ads on sports pages to ensure men see them.

The Tories calculate that some men could see up to a quarter of the money on their payslip disappear as the Working Families Tax Credit - a top-up for lower wages paid to the family's main earner, usually male, through the pay packet - makes way for the new Child Tax Credit which is paid to the children's main carer, usually female, through their bank.

The change is particularly awkward as it comes ahead of a 'feminised' Budget promising new benefits for working mothers, including increased maternity pay and new rights to work part-time.

Gordon Brown will defend the national insurance rises tomorrow in a speech to the British Chambers of Commerce. His audience reflects the fact that while the tax hikes have been seen as an assault on Middle England's wallets, the lion's share of the cash for the NHS will be coming from employers' national insurance contributions. The Tories are warning that it will turn out to be a 'tax on jobs', with the extra costs for firms tipping some over the edge in a gloomier economic climate.

Treasury ministers are expected to argue that the money is to improve the NHS and cut waiting times, and businesses will benefit from reduced absence due to sickness. Whitehall sources argue the tax rise will compare favourably to those paid by employers in France, Germany and the US to provide health cover.

The Treasury also argues that for many families, the effect of NICS rises will be cancelled out by the more generous Child Tax Credit.

Brown is also expected to prepare the ground for the lowering of his economic forecasts, with many experts predicting the Chancellor will have to borrow more both to cover the gap in expected tax receipts and the cost of the war.

The International Institute of Strategic Studies estimates that a relatively short conflict in Iraq could cost around £3.3 billion, with the cost rising by around £750 million a month if war lasts longer than six weeks.