Clause 3 — Rate of value added tax

Part of Bill Presented — Shared Parenting Orders Bill – in the House of Commons at 5:30 pm on 13th July 2010.

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Photo of Liam Byrne Liam Byrne Shadow Chief Secretary to the Treasury 5:30 pm, 13th July 2010

I am grateful, Mr Hood. I will therefore confine my remarks to amendment 40, which asks the Treasury to lay a report on the scope of the standard rate before the Commons before the rise takes effect on 4 January 2011. The reason for our concern is that in the past, the Deputy Prime Minister has said that it is more liberal to tax people on their income than on their work. That automatically raises questions about whether the scope of VAT as currently set out by the Government is set to widen and widen.

We have a few assurances on the record. We learned from those on the Treasury Bench this afternoon that Ministers will not extend VAT to hardback books or newspapers, which is very welcome, but there are of course a range of goods that are currently zero-rated, including food, clothing, footwear, transport, talking books for the blind and the disabled, sewerage and water, building construction, protected buildings, caravans and houseboats, drugs, medicines and aid for the disabled, tax-free shops and some charitable contributions. We should like to hear more from the Government about whether there are any plans, either now or later on in the Parliament, to withdraw what is currently zero-rated. We want to give them the opportunity to put that beyond doubt.

This is an important debate. The VAT increase is a measure without a mandate and there is therefore an obligation on Members to ensure that the people who need to be protected are protected by the votes that are taken this afternoon.