Skip to main content

VAT Increase

Volume 514: debated on Wednesday 21 July 2010

10. What recent discussions he has had with the Chancellor of the Exchequer on the effect on households in Scotland of the proposed increase in the rate of value added tax. (8920)

The VAT rise is part of a fair and progressive Budget. Difficult decisions are necessary to tackle the record deficit that this Government have inherited, but the richest will pay more than the poorest.

Given that every independent analysis says that VAT rises are not progressive but regressive, did the Minister examine the impact of the rise on any aspect of Scottish industry and, in particular, the tourism industry in my constituency, which is a large employer and very relevant to household incomes? Did the Government look at the impact of the increase in VAT on anything?

The right hon. Lady makes a good point about the tourism industry and she will know that many jobs in that industry are low paid. The decision to raise the income tax personal allowance for under-65s by £1,000 in 2011-12 will benefit 2 million basic rate income tax payers in Scotland, including many working in the tourism industry.