One of the strangest Commons select committee inquiries under way at the moment is the Treasury committee's inquiry into the 10p tax issue.
The committee launched its investigation with the intention of producing ideas that would help the government decide what to do to compensate the 5.3 million families who have lost out from the abolition of the 10p tax band.
The announcement of the inquiry was itself a concession to potential Labour rebels and at the time the Treasury hinted it would wait for the committee's recommendations, and then include them in the finance bill later this summer.
But then Gordon Brown and Alistair Darling decided to deal with the 10p issue by announcing a surprise tax cut worth £2.7bn.
There are still around one million taxpayers who will be net losers, because they earn so little that the raising of the basic rate of income tax threshold (which is how the £2.7bn is being paid) will not compensate them for the amount they will lose from the replacement of a 10p starting rate with a 20p starting rate.
But, in political terms, ministers now appear to believe that the problem is fixed and, anyway, it is hard to see how they could find any more money for further compensation. The committee may find it hard to come up with recommendations that will get taken up.
However, I'm told the committee will also consider aspects of the "decision-making process" around the 10p announcement. Given that most commentators think this has been a monumental catastrophe, this part of its inquiry could be quite interesting.
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2.30pm
Darling opens with a short statement in which he says he will come back with measures to help the one million people still losing out in his pre-budget report in the autumn.
Two of the Tories on the committee, Peter Viggers and Michael Fallon, challenge Darling over the notion that borrowing £2.7bn could lead to the government breaking one of its fiscal rules - the rule saying debt should not exceed 40% of GDP. Darling says: "I do not accept that we are putting our fiscal rules at risk."
Fallon asks Darling to confirm that if the £2.7bn tax cut is not repeated next year, then 13 million families will see their incomes going down. (At the moment the £2.7bn change to tax allowances is just a one-off.) Fallon tries the question three times. But Darling just says he will not "box himself in" and he says he will address the issue in his pre-budget report.
2.45pm
Another Tory, Graham Brady, suggests that the tax system may have to get more complicated if Darling has to adjust it again next year. Darling says that simplification is one of his priorities.
Siôn Simon (Lab) asks about low-income workers without children. He points out that the government has prioritised people with children, and he is pushing Darling to say that the government will alter its priorities.
Darling says he does not want to take help away from children. But he goes on: "If you are asking me do we need to make sure that people who do not have children are able to share the country's rising prosperity, then yes we should."
George Mudie (Lab) wants to know if the Bank of England's monetary policy committee knew that the tax cut was in the pipeline. He say that pumping that much money into the economy could have inflationary consequences.
Darling is evasive, but he says that he does not think the announcement would have made any "material difference" to the MPC's considerations.
3pm
Mudie also wants to know if the government is still on course for meeting its target of halving child poverty in 2010.
Darling says it is his intention to meet the target. "It's a very important target."
John Thurso, a Scottish Lib Dem, asks about fuel poverty and particularly the situation in Scotland, where the weather is colder. What is Darling doing about it?
"What can I do about it? The weather?" replies Darling. So he can do jokes.
Thurso also asks about the rising price of fuel. Darling confirms that he will consider what to do about the proposed increase in fuel duty due in October nearer the time.
Darling rejects the idea of different rates of fuel duty for different (ie colder) parts of the country.
Thurso presses him on this. But Darling insists that it would be "difficult" and that he's "not convinced this would be a workable solution". But he offers to send Thurso a paper on the subject.
Nick Ainger (Lab) asks if the Treasury is doing anything to establish a "social tariff" (ie discounts for poor customers) for people who use oil for their heating, in the way that there is a "social tariff" for electricity and gas customers. Darling acknowledges that this is an issue.
3.15pm
Fuel prices are an important issue for people at the moment. But I'm not sure what this has got to do with the 10p issue.
Ainger also asks about the story in the news today suggesting that the oil reserves in the North Sea are far greater than people have acknowledged. Darling says there are substantial reserves left to be extracted, but that the remaining oil will be harder to get out.
The Treasury has submitted a 20-page memorandum to the committee which it has released to coincide with the hearing. I've been skimming through it. I can't find any shock revelations, but there are some interesting figures giving more detail about the impact of the £2.7bn announcement.
Of the 1.1m people who will still lose out from the abolition of the 10p band despite the £2.7bn announcement, 100,000 have a household income under £10,000; 200,000 have a household income between £10,000 and £15,000; 200,000 have a household income between £15,000 and £20,000, 300,000 have a household income between £20,000 and £30,000; 100,000 have a household income between £30,000 and £40,000, and 200,000 have a household income worth more than £40,000.
These figures are for household income, not individual income. But they are still quite surprising. They suggest many of the losers are not in low-income homes.
Darling is now being asked about margin tax reduction rates.
An MP now asks Darling if ministers knew that there would be losers when the abolition of the 10p rate was announced last year. Darling says the "distribution effects" were looked at.
Philip Dunne (Con) presses the chancellor to admit that the situation should have been addressed faster. Darling agrees.
Dunne asks if he can take that as an apology.
"I have said on many occasions that I'm sorry the situation arose in the first place," Darling says.
Dunne then asks about the increase in Treasury revenues from the increased oil prices. He quotes figures suggesting that the Treasury gains £4bn from oil being $103 a barrel, and about £8bn from oil at $130 a barrel.
Darling points out that government revenues fluctuate. While the Treasury might be collecting more tax revenue from increases in the oil prices, revenues might be going down elsewhere.
"You cannot look at one tax in isolation. Therein lies the path to ruin," says Darling.
John McFall, the committee chairman, comes in and brings it back to the 10p issue.
He says that, in the Treasury memorandum, the Treasury says that 70% of the households paying more tax as a result of budget 2008 have incomes worth more than £20,000.
McFall says that when he asked Brown about the issue in the Commons, the PM said it was 70% of people paying more tax as a result of the budget earning more than £20,000. Was it households or individuals, McFall asks.
It's households, a Treasury official sitting with Darling says.
McFall asks about tapering allowances. Darling says it is worth looking at, but complicated.
"I would not rule it out, because it is a circuitous way you can target," Darling says.
Andy Love (Lab) says most of the correspondence he has had on this issue has come from people not directly affected by it. Does Darling accept that the issue has had an effect on Labour's reputation for fairness.
Darling says he will "yield to no one" in his belief that the government is committed to fairness.
Love says the row gave the impression the government was no longer looking after the less well off.
He asks if there will be a "new impetus" to doing something about child poverty.
3.45pm
I've been looking through the Treasury memorandum again. The committee wanted to know when the government first said the 10p tax ban was only a "transitional" measure. Brown brought in the 10p starting rate when Labour came to power, and at the time no one said anything about it being transitional.
In its response to this question, the Treasury dodged the question. It said Darling made it clear when he made the £2.7bn announcement that "the government was better able to support low-income households through tax credits than through the 10p starting rate of income tax".
Back to Love. He tells Darling that, at a Smith Institute seminar on taxation, people were making the point that there was an unwillingness to defend the principles of taxation, the fact that it benefits society.
Darling says he suspects that has always been the case.
Love asks if it is getting worse.
Darling says he was not around at the time of the window tax.
Jim Cousins (Lab) says Polly Toynbee in her Guardian column yesterday reported that most of the cabinet are now clamouring for tax cuts.
Darling says you do not necessarily have to choose between public spending and lower tax. He says he will enjoy his next exchange with Polly on the subject.
Cousins says the country is now "very different" from the one Labour inherited in 1997. He suggests that there is a "working underclass" whose jobs change week by week, or even day by day.
Darling says that in 1997 there was an underclass that did not work. But he accepts that there have been "structural changes" since 1997.
We're way off 10p now, but I'm not complaining - it's quite interesting.
Cousins says it's better to have a working underclass than an unemployed underclass. But that does not mean the government could not do more to help the working underclass.
Cousins says this group does not want to claim tax credits, because their circumstances change.
Darling says he wants to look at the way the working tax credit works.
Cousins asks about the "household means test" aspect of the system, whereby someone loses out on a tax credit because he or she is living with someone who does not qualify. (It's what the Tories call the "couple premium" - the way in which the benefit system can sometimes discriminate against people living together.)
Cousins asks about differences between some of the Treasury figures and the Institute for Fiscal Studies figures. The Treasury has given the committee figures about the impact of the 10p decision based on households. The IFS figures are based on families, ie individual taxpayers. A young person living with his or her parents counts as one household, but two families.
Cousins suggests that this has an impact on Treasury thinking. He suggests the Treasury has sent a message to young people: "You're not really a loser, because you're living with your parents."
In response to another question, Darling admits that the benefits system is very complicated.
He reminds the MPs that he was in charge of welfare for four years. He says it is always tempting to simplify the system, but that you can't go very far in simplifying it before you start creating more losers.
4.10pm
It's getting dull again, so I've had another look at the memorandum. Here's another breakdown of the 1.1 million households still losing out from the abolition of the 10p rate.
Around 300,000 are households with people aged 60 to 64, 200,000 are households with out-of-work people aged under 60, 300,000 are households with people working and eligible for tax credits and 300,000 are households with people working and not eligible for tax credits.
Ah, an interesting question. Graham Brady (Con) asks how much the Treasury will save from people no longer being eligible for housing benefit, etc., as a result of the £2.7bn handout.
A Treasury official says he does not have a figure, but that it will be in the "tens of millions".
Fallon comes in again. He asks Darling if he can explain why the government's reputation for economic competence has fallen so sharply.
Darling blames the economic backdrop.
McFall asks one further question about the Financial Services Authority. The government is supposed to be legislating to beef up its powers, but McFall has heard that there won't be a bill in the next legislative session.
Darling says that legislation is needed, but that he can't announce when it will take place.
And that's it. It's over.
What did we learn?
Not much, I'm afraid. Darling is going to do more to help the 1.1 million who are still losing out from the abolition of the 10p tax rate. But he won't tell us what. We'll have to wait until the pre-budget report.
Report: 10p tax row: Darling faces Commons committee
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