Response to Simon Hughes comments on a possible VAT rise in next week's Budget

15/Jun/2010

The Lib Dem deputy leader is absolutely right to say that VAT is the most regressive form of tax and that it penalises the poorest.

In the run up to the Budget I hope he will join me in arguing that a rise in VAT next week, which we saw when the Tories got into office in 1979, would be deeply unfair. It would hit pensioners, the unemployed and those on the lowest incomes hardest.

Mr Hughes needs to persuade his leader Nick Clegg to stick by what he said during the general election, which is that a VAT rise and immediate cuts in public spending this year would be deeply damaging to growth, jobs and our economic recovery.

We need to reduce the deficit steadily and fairly and in a way that does not undermine our recovery. But it would be immoral to make millions of poor people, pensioners and families bear the brunt of that deficit reduction – especially now that the borrowing forecasts have been revised downwards.