Government's VAT cut fails those who need the most help

Written by Shas Sheehan, Wimbledon Parliamentary Campaigner and published in Wimbledon Guardian on Thu 27th Nov 2008

Food prices have rocketed in the last year.

Last Thursday in the All Saints Day Centre in South Wimbledon we had the pleasure of a talk by Dr Vince Cable, MP for Twickenham and the Shadow Chancellor of the Liberal Democrats, on the economy and the rising cost of living.

At the packed meeting, Vince gave an illuminating insight into some of the causes of the collapse in confidence in the banking sector and said it was crucial that the government ensured that money made available to bail the banks out was passed on to businesses to stop widespread failure and escalating unemployment.

He also spoke out for the people in Britain who have endured a year of rocketing fuel, transport and food prices with many still out of pocket following the Government's decision to double the starting rate of income tax, and called for permanent income tax cuts to help struggling families weather the recession.

He went on to say that to make these tax cuts lasting, they have to be funded. That means shifting the tax burden onto pollution and ending the tax perks and loopholes enjoyed by the highest earners.

We find that the Government has missed a golden opportunity, and neither made more money available to businesses, nor made the tax system permanently fairer, and instead, announced that it will hit those struggling to make ends meet with yet higher tax bills by increasing National Insurance. Everyone earning over £19,000 will be hit.

How sad then, that rather than increasing investment in sustainable capital projects such as building social housing, increasing energy efficiency and improving public transport which will benefit the country tomorrow as well as today, the Government has opted for a temporary cut in VAT which will benefit big spenders the most and not give the economy the boost it needs.

At a time of economic emergency, Gordon Brown has once again failed those who need the most help.