Cost of Living

Debate between Albert Owen and Laura Sandys

Wednesday 16th May 2012 Commons Chamber

[Albert Owen]

The hon. Gentleman knows that I do not always vote with my party, and if he checks the record, he will see that I have voted for several SNP measures. If they are sensible, I will vote for them, but not many are. [Interruption.] I cannot speak for the rest of Labour, but I can speak for myself very comfortably in this House, and have done from both the Government and Opposition Benches.

It was wrong to increase VAT. It took money out of the economy at a time when we needed a fiscal stimulus. That is what business is telling me. That is why it is disappointing that the Budget increased VAT instead of addressing the situation. As the Institute for Fiscal Studies said, VAT is a regressive tax which most hurts the poorest and most vulnerable in our society. The Prime Minister and the leader of the Liberal Democrats said as much before the general election, yet when they entered government, they increased it. That is what turned small economic growth into a double-dip recession. That is what business tells me. I am willing to stand up and speak for businesses, especially hard-working businesses. It is a disgrace for senior Ministers to say that businesses should simply work harder, given that the Government are increasing taxation and taking money out of the economy, as a result of which people are not spending on their businesses.

[Laura Sandys]

I remind the hon. Gentleman that the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), wrote in his published memoirs that he, too, was going to increase VAT.

[Albert Owen]

I had many debates with my right hon. Friend when he was in office. I did not shirk that responsibility. He felt that increasing VAT was the best thing to do but was outvoted in Cabinet. It was not a Government decision. He wanted to increase VAT, but he was wrong. He also wanted to increase vehicle excise duty, but I argued and voted against that measure because it, too, was wrong. On those issues, he was wrong. He did many brave things. For instance, he introduced the 50p rate at the end of our time in office. [Laughter.] Government Members laugh. He did it at the end, but he did it because we were in a crisis and needed extra revenue. That was supported by a lot of people at that time, yet this Government have managed to reduce the taxation for the richest while putting VAT on businesses and as a result a tax on jobs.