Clause 66 — VAT: refunds to certain charities

Part of Bill Presented – in the House of Commons at 3:15 pm on 25th March 2015.

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Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury) 3:15 pm, 25th March 2015

It is a pleasure to serve under your chairmanship, Mr Hood. New clause 1 stands in my name and those of my right hon. Friend Ed Balls and my hon. Friends the Members for Nottingham East (Chris Leslie) and for Kilmarnock and Loudoun (Cathy Jamieson). It requests the Treasury to commission

“a report on the impact of the increase in the standard rate of VAT which took effect from 4 January 2011.”

The report must estimate the impact of that increase on living standards, small businesses, the fairness of the taxation system and economic growth.

The House has debated issues relating to VAT on a number of occasions, which the Minister referenced in his opening remarks, and it was, of course, a hot topic of debate at Prime Minister’s questions today. If the Prime Minister or any Conservative Members think that they can put the issue to bed today, let me tell them that they will not find it that easy, and I will set out the reasons for that during the course of my speech. Frankly, to believe what the Prime Minister has said today about VAT would be rather like believing what the Deputy Prime Minister said about tuition fees before the last general election. The public are simply not going to buy it, and I think the whole House is well aware of that.

Our new clause asks for a review because Oppositions are limited in what they can call for in amendments to a Finance Bill, but no Member can be in any doubt about our argument about the consequences of the political choices that are being—and that have been—made by the Conservative party and signed up to by the Liberal Democrats, even though they have been desperately trying to pretend that they had nothing to do with the fiscal assumptions given to the OBR, on the basis of which it made its assessments of what is likely to happen in the next Parliament. I welcome to the debate the lone Liberal Democrat on the Government Benches, Gordon Birtwistle. Perhaps if I give way to him he can rule out raising VAT.