The VAT rise on 4 January signals bad news for Rother Valley families and pensioners, right on the back of Christmas.
It is the worst possible time for the Government to increase VAT from 17.5 per cent to 20 per cent, especially as it comes when we are seeking to claw our way back to recovery and when people are stretched as the impact of the world wide recession continues to be felt.
Despite the worrying signs that the Government’s plans are hitting jobs and growth, they are insisting on going ahead with this unfair tax increase on the British public.
Increasing VAT is wrong for so many reasons. It will hurt motorists as petrol prices and the cost of motoring will rise. It will hurt families when they go to the shops and it will hurt small businesses, many of whom will not want to pass on the increase to their customers.
The VAT rise will also hit pensioners on fixed incomes very hard and none of the Government’s policy announcements come close to compensating for it. The basic state pension isn’t going up any faster than before but pensioners will have to find more than a hundred pounds a year to meet a rising cost of living with higher VAT.
Many pensioners will really struggle to afford those higher costs and the Government’s other policies won’t help them very much. Analysis shows that in 2011 alone, pensioners are set to lose £106 a year more because of the decisions that the Chancellor has made. It also shows that the poorest ten per cent of pensioners are set to lose a third more as a percentage of their income compared to the richest ten per cent.
Pensioners know that we have to reduce the deficit, but they also know an unfair plan to do it when they see one. This Government can’t pretend that they are protecting the elderly when they are going to leave them significantly worse off.
I hope that 2011 is not going to be a year continually marked by unfair decisions from this Government.