Finance Bill Debate
13th July 2010
Responding to Opposition calls for a report on the impact of the VAT rise on pensioners, David Burrowes asks if they would have produced such a report had the former Chancellor raised the VAT rate to 18% which he is reported to have wanted to in November.
Mr David Burrowes (Enfield, Southgate) (Con): Not being so new to the House, I am aware, obviously, of the reports today in The Times revealing that the shadow Chancellor was wishing to increase VAT to 18%. Can the right hon. Gentleman confirm, in relation to the pre-Budget report stage in November, whether, if the shadow Chancellor had had his way to increase VAT to that level, a report such as the one that is proposed in amendment 46 would have come to pass?
Mr Byrne: Happily, the question is hypothetical, because the then Chancellor reached a decision on the right package of measures needed to halve the deficit over the next four years. The hon. Gentleman's problem is that the Conservative party concluded that it needed to bring forward by a year the date at which debt as a proportion of GDP needs to start to fall. Therefore, another £40 billion in tax rises and spending cuts are needed. The only way to secure that is to take an enormous risk by whacking domestic consumption with a regressive tax. So he must contend with a question of economics and one of fairness. [ Interruption. ] He says from a sedentary position that it is a question of leadership, but the art of fairness is integral to the effective leadership of this country. That is what his constituents would expect, and it is why I hope that he will support me in these amendments to carry out a study of the impact of the new tax, so that we can understand how to remedy the problem in the next Finance Bill.
