Finance Bill

Debate between Lord Beamish and Nadhim Zahawi

Tuesday 6th July 2010 Commons Chamber

[Mr Jones]

My hon. Friend makes a good point. There will be a cost not only to large businesses but to small businesses. That brings me neatly on to the British Retail Consortium, which has grave concerns about the VAT increase. It recently said that it could cost up to 163,000 jobs and affect some £3.6 billion of spending. Again, in many communities those jobs are vital. This is on top of the very difficult economic climate that businesses are facing. In my constituency, retail-led development is a catalyst for regeneration. If, for example, the new Tesco in Stanley does not go ahead because of these proposals, it will have a knock-on effect on the regeneration of an entire town.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

On that point, I wonder whether the hon. Gentleman protested as much when the previous Government raised VAT on businesses? Did he make that point in the Chamber?

[Mr Jones]

The hon. Gentleman has to realise that these are his Government’s proposals. I have the luxury of being in opposition, where I can oppose the Government.

[Nadhim Zahawi]

For a long time.

[Mr Jones]

The way the Government are going with this Budget, I am not sure that it will be. The hon. Gentleman will have to get used to the fact that we will question the Government on the proposals because they will have a draconian effect on my constituents in North Durham.

I must refer not just to the retail trade or charities, but to the Conservative grass roots. Tim Montgomerie, on his website ConservativeHome, said:

“First, it hurts the poor most of all and, second, both the Conservatives and the Liberal Democrats said they had ‘no plans’ to increase this tax. At a time when trust in politics is so low we don’t need ‘plans’ to emerge tomorrow.”

That was in advance of the announcement that is contained in the Bill.

The other sector that the Bill will have a dramatic effect on is the construction sector. Yesterday, we saw the Building Schools for the Future programme decimated, directly affecting thousands of jobs. I am glad that my hon. Friend the Member for Halton (Derek Twigg) is back. He mentioned the decimation not only of BSF in his constituency but of other projects that have been put forward. Again, business and construction will have to carry the cost of the VAT increase.

Another sector that will be affected will be charities and the work that they do. I know that under the new Conservative approach, as part of the big society, charities are supposed to be stepping up to the mark, but they will be the ones that will be affected.