Finance Bill

Debate between Lord Hanson of Flint and Ian Swales

Tuesday 28th June 2011 Commons Chamber

[Ian Swales]

No, I do not accept that, because of the long list of items that are VAT-free. If everything had VAT applied, I would agree with the hon. Lady.

We have had no view about how the Opposition would fund the proposed cut in VAT. If they wished to borrow, which presumably is the answer, there are many options which are fairer to pensioners and the less well-off and more likely to encourage economic growth. Reducing VAT would be a flawed policy, just as it was last time, and I urge the House to reject new clause 6.

[Mr David Hanson (Delyn) (Lab)]

I shall speak to new clause 10, but before I do so, may I remind the hon. Member for Redcar (Ian Swales) that he fought an election on the Tory tax bombshell? I remember pictures of the Deputy Prime Minister, the right hon. Member for Sheffield, Hallam (Mr Clegg), standing in front of a poster that referred to a Tory tax bombshell—

--- Later in debate ---

[Mr Hanson]

My hon. Friend’s region of Yorkshire and Humberside has a 9.2% unemployment rate overall, compared with 5.7% in the south-east of England. For someone who is unemployed, the figure is 100% wherever they are. Nevertheless, there are regions of the United Kingdom where many people are chasing jobs, there is a lack of consumer confidence, traditional manufacturing and the retail industry are being hit by a lack of demand, and growth is not occurring, and the VAT increase has been damaging to all those things.

[Ian Swales]

I have listened carefully to the right hon. Gentleman’s speech and that of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). Neither has contained details of the cost of such a reduction in VAT. Once we know that figure, we will be able to give many ways in which our economy could be stimulated with such an amount of money. We are still not sure where it is coming from. Reducing the price of Italian sports cars and round-the-world cruises is only one option.