George seeks review of VAT rise

28.06.2010  Local MP, Andrew George, has tabled an amendment to the Budget resolutions which will be debated this afternoon in the House of Commons.

Mr George and three of his Liberal Democrat Parliamentary colleagues have called upon Treasury Ministers to undertake an impact assessment of the proposed 2½% VAT rise before it is implemented in January.

Mr George, who tabled the Motion on Thursday, has already been in touch with his Liberal Democrat Parliamentary colleagues prior to the debate this afternoon, and is seeking concessions from Government before the final implementation of the VAT rise is implemented.

Mr George said, “The Chancellor promised that the Emergency Budget would protect the vulnerable, but a VAT rise is likely to mean that the poorest in the country will pay a higher proportion of their income meeting the VAT tax rise than wealthier people. On top of the cuts in public services, which will have a greater impact on the poorest, the VAT rise will compound the situation.

Although, I am naturally pleased to see that a large number of Liberal Democrat policies were incorporated in the Budget – namely the introduction of an annual increase in the personal allowance taking the poorest out of tax altogether, a guaranteed rise in the State Pension and Pension Credit, the closing of the Capital Gains Tax loophole and a banking levy, to name a few – there are some elements of the Budget which deserve further debate.

“We had always understood that both Parties in the Coalition would prepare a budget which recognised that those who dropped the country in the financial crisis it is in should do most to shoulder the burden of getting us out of it. Equally, those wealthy who have, in recent years, managed to pay less tax than their cleaners, should have the tax loopholes available to them closed. I’m not sure that the Budget lives up to its billing and so I hope that we can persuade Treasury Ministers to rethink some of these measures before they are implemented.

“My proposal is not tantamount to an earthquake along the fault line of the Coalition. The Coalition is different to the one party rule we have experienced in the past.  It is a Coalition of two distinct parties with distinct policies and values. Those items, like budget measures which clearly cannot be debated between the parties prior to announcement, can, and should, be subject to an open debate prior to implementation. That is all my Parliamentary colleagues and I are doing.”

Mr George is expecting that the Chief Secretary to the Treasury, Rt. Hon Danny Alexander MP, will accept his amendment and agree to the undertaking of a further impact assessment of the VAT rise prior to its implementation.