Journal Column – 6th July

As my party’s spokesperson on Treasury matters, I tabled an amendment to the UK Government’s Finance Bill last week calling for a temporary reduction in VAT back to 17.5% – down 2.5% from the current 20% rate to help struggling families and small businesses.  VAT is a highly regressive tax which hurts the most vulnerable in society.  With economic growth struggling, and VAT being a major factor in the well above target inflation, a temporary cut in VAT would have helped families under financial pressure.  Imagine my complete amazement when the Labour party did not support the clause.

It was only three weeks ago that Labour’s Shadow Chancellor, Ed Balls MP, announced his party’s flagship policy to cut VAT stating it was desperately needed.  It was needed so much that Mr. Balls was too late to submit his amendment to the Conservative-Lib Dem Bill that the Speaker of the House didn’t select it.

This new level of hypocrisy from the Labour party is quite simply jaw-dropping.  On one hand they’re arguing for a temporary VAT cut – and then when the moment presents itself – Labour MPs sit on their hands.  Abstaining from a vote is as good as letting the vote go through. Perhaps we shouldn’t be surprised, though, as the same thing happened last year. Labour said it was against the VAT hike to 20% but yet again abstained and allowed the Tory and Lib Dem VAT hike to sail through.

The Labour party needs to inform the public of what exactly the party’s economic policy is.  It’s flagship policy of VAT reduction is in a complete shambles and has played into the hands of the Tories and Lib Dems.  Labour has lost all credibility on this issue and the people of Wales are set to suffer this added burden on top of the UK Government’s cuts agenda.  Yet another example of Labour’s ‘Standing up for Wales’ mantra not being worth the paper it was written on.

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