VAT


Before the General Election I did not see myself ending up voting for a rise in VAT. None of the 3 main parties said that they would increase VAT, but we find ourselves with an increase to 20% from January.
Personally I would have preferred an increase in Income Tax (alongside a bigger increase in the personal allowance to help the lowest paid taxpayers), but I suspect that an Income Tax rise would have been just as unpopular. No one wants to see tax rises and no one wants to see budget cuts but both are necessary.
I didn't vote against the VAT rise because there isn't a credible alternative on offer. The Nationalists put down an amendment to stop the increase, but they haven't offered an alternative.
Labour have been very hypocritical - they claim to oppose the VAT rise (but abstained on some votes), but documents in the Treasury clearly show that they had every intention of increasing VAT!
I don't want VAT to stay at 20%. I had a question at Treasury questions yesterday and I argued that once the deficit has been dealt with and we have got the economy back on its feet we should be looking at bringing VAT back down to 17.5%. Tough times call for tough action, but once the emergency is over we should reduce VAT again.

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