We store cookies on your device to make sure we give you the best experience on this website. I'm fine with this - Turn cookies off
Switch to an accessible version of this website which is easier to read. (requires cookies)

Ineffective VAT cut only helping the rich

April 8, 2009 7:00 AM

A leading local Liberal Democrat has slammed the government's VAT cut as ineffective. Michael Mullaney, Liberal Democrat parliamentary spokesman for Bosworth has attacked the cut after figures were published showing that the cut has benefited the richest households the most. The richest households will save around £1.2bn from the Government's VAT cut, while the poorest 10% will only save an estimated £360m.

The savings work out at an average of over £9 a week for the richest households, while poorer households are saving less than £3, despite recent claims from Gordon Brown that families would save at least £5 a week.

Pensioners are among the worst hit by the cut, with the poorest households saving only £2 a week while the richest save almost £7.

Michael Mullaney said "The Government's defence of its wasteful VAT cut continues to unravel. Its benefits have been overstated and most of the money is not helping the poorer households that are struggling in the recession.

"This ineffectual VAT cut is costing £1bn a month. Ministers should scrap it immediately and spend the money on transport and environmental projects which would boost the economy, create new jobs and leave a lasting green legacy for Britain.

"For the same money that it costs to make that tiny VAT cut, the Liberal Democrats propose a huge economic programme that will benefit people here in Hinckley and Bosworth. A programme that will put the unemployed back into work and leave a lasting legacy that will save energy, reduce bills and fight climate change.

"Instead of a meaningless VAT cut that most people won't even notice, we will insulate every school and hospital in the country and the homes of a million people languishing in fuel poverty.

"We will build thousands of desperately needed social houses, install money-saving smart meters, re-open rail lines and build new trains."