After considerable criticism for giving just 10 days notice that it was withdrawing the Home Computing Initiative (HCI) the government has invited the CBI to come up with an alternative scheme.
The Confederation of British Industry (CBI) called on the chancellor to reconsider his decision and he has now put the ball back in their court.
But it will probably be too late for many of the companies whose sole business has been running the schemes, and which have already made staff redundant.
Almost half a million people took advantage of the tax break at companies like BT, Tesco and Royal Mail. The scheme effectively let employees buy new computers from their employers over a three year period with the instalments being deducted from income before tax.
But the Treasury said the tax exemption was being exploited and that it was no longer the best way to provide help for lower income households.
CBI Director-General Sir Digby Jones told the programme: "For the chancellor to impose this without a moment's consultation... Frankly it's not the way to get Britain to be competitive." He was very pleased when the chancellor invited him to come up with proposals for a replacement scheme
I think they realise that they have done a knee-jerk reaction and have thrown the baby out with the bath water," he said.
In a written statement, the Treasury confirmed that the chancellor remained "fully committed" to boosting IT skills.
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