Clause 66 — VAT: refunds to certain charities

Part of Bill Presented – in the House of Commons at 4:00 pm on 25th March 2015.

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Photo of Sheila Gilmore Sheila Gilmore Labour, Edinburgh East 4:00 pm, 25th March 2015

That is clearly another way the Conservatives might seek to close this gap they have opened up for themselves.

We need to know a lot more about this going forward, and so do the electorate. As hon. Members have said, VAT is a regressive tax. Even though those who have bigger spending power sometimes spend more and so may, in cash terms, spend more in VAT. It is a regressive tax, as are all these indirect taxes. Our position on this is clearly different: we do not believe it is right that people on low incomes should be taxed, in effect, to give other people tax cuts.

We have said a great deal about the 50p issue, which we will discuss later this afternoon, but one of my big concerns for some considerable time has been that low-paid workers already under the tax threshold were being offered nothing from the Government, who constantly talk about raising the tax threshold further. They have no plans to help those people any more. Those people face a real risk that if VAT is increased, they will end up paying the price of a reduction in income tax from which they will not benefit by one penny.