Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 11:30 am on 14th January 2009.

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Photo of Gordon Brown Gordon Brown The Prime Minister, Leader of the Labour Party 11:30 am, 14th January 2009

We raised the pension by £60—the Conservatives opposed it. We raised child benefit from 1 January—they opposed it. We are raising tax allowances in April—they opposed it. We are investing more in the economy and they are opposing that.

As for VAT [Interruption.] Incidentally, it was promoted not just by us but by the former Chancellor, Mr. Clarke, and Lord Lamont, who said:

"If there are to be any tax cuts, my first candidate would be VAT".

So the Conservative party is not exactly united on that. The right hon. Gentleman may think that VAT is unimportant, but at the end of every week, the typical family has more than £5 extra in their pockets. It may not matter to the people on the Opposition Front Bench that £5 extra is in people's pockets—that is £275 a year, as a result of the cut in VAT. It is more money for everyone in the community, not just the few whom they support, and more money so that people can make choices about what they spend. If we take together all the measures that we have taken, and look at every other country in the world, we find that they want fiscal expansion and that the Conservative party is the only party that wants public spending cuts. The Conservatives are out of touch with the rest of the world; they are completely isolated.

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David Clark
Posted on 15 Jan 2009 2:48 pm (Report this annotation)

The question had nothing to do with pensions, child benefit, tax allownaces. Clearly the centre piece of the Governments policy, the VAT cut, hasn't worked that is why new policies are almost announced daily. The problem for many businesses is the inability to get cash injections when they need them. This should have been addressed by the Government months ago as encouraged by both opposition parties.

Doug Rawkins
Posted on 15 Jan 2009 3:57 pm (Report this annotation)

How is the figure of £5.00 extra per week to spend arrived at?

Chris Turner
Posted on 15 Jan 2009 6:06 pm (Report this annotation)

However Gordon has arrived at the figure of £5.00 per week, it still isn't £275 a year in the pocket. I make £5 x 52 weeks to be £260. Never mind, Prime Minister! You're only in charge of the entire economy of this country.

Peter Cousins
Posted on 17 Jan 2009 11:50 am (Report this annotation)

The “Saviour of the World” is entitled to comment that the sums are due to rounding errors (as in the average family save more than £5 a week).

However to achieve this saving a family would have to spend £230 (£200 cost plus £30 VAT, whereas it used to be £35, hence the £5 saving) a week or nearly £12000 a year. This is more than half the average tax paid wage!

Surely it is this figure that misrepresents reality for most families (i.e. they do not save £5 per week on VAT expenditure)?