The Budget today makes very clear choices about who will pay to reduce the deficit.
- Higher VAT – with everyone paying more, but hitting the poorest hardest.
- Benefits set on a permanently lower path with an uprating change, just as the Tories did with pensions in the 1980s.
- Cutting tax credits from families on low and modest incomes, far below the £50,000 claimed during the election campaign.
- A two year pay freeze for public sector workers like nurses and teachers.
There was a choice today. The Government could have protected people from losing their jobs and gone for economic growth. The Government have made the wrong choice. This Budget will hit growth and jobs by cutting back Government support for the economy too quickly.
Before the election, the Liberal Democrats warned that the Conservatives would raise VAT.
“Our plans do not require a rise in VAT. The Tory plans do. Their tax promises on marriage and jobs may sound appealing. But they come with a secret VAT bombshell close behind.” Nick Clegg, Liberal Democrat press release, 8 April 2010
It turns out that they were right – but now they are in Government themselves, supporting a VAT increase.
