Coalition wins crucial vote on VAT rise

A bid to scrap the 2.5% hike in VAT was overwhelmingly defeated in the Commons in a major victory for the Coalition Government.

The Scottish and Welsh nationalist move was rejected by a majority of 295, after a lengthy debate on the Budget-enacting Finance Bill last night.

MPs voted 321 to 246, a Government majority of 75, in favour of increasing VAT to 20% from January 4, 2011.

Treasury Exchequer Secretary David Gauke said the rise from January was "unavoidable" after inheriting a record budget deficit from the previous Labour government.

But SNP spokesman Stewart Hosie branded it "regressive, socially damaging and economically dangerous".

He warned it would hit jobs and push up prices on the high street just as Britain was clawing its way out of recession.

The Government was also facing a challenge from its own side in committee stage debate on the Bill.

A group of five Liberal Democrat backbenchers, led by Andrew George, tabled an amendment to limit the VAT rise to 18% - an increase of just 0.5% on the current rate.

Mr George (St Ives) said: "Of all the measures to restore the public finances it seems to me that a VAT rise has to be among the least welcome of all of the alternatives."

He said that as an "emergency" measure it should be time limited to two years when its impact on the economy could be considered afresh by Parliament.

Mr Gauke told him the VAT rise had to be seen in the overall context of the Budget and was the "least economically damaging" way to deal with the deficit.

A smaller rise in VAT undermined the "basic rationale" for the increase and would not allow the Government to deal with the deficit as quickly as ministers would like.

He dismissed calls for a time limiting sunset clause, saying this would have a damaging effect on the "pattern of expenditure".

Later analysis of the division list showed that Liberal Democrat Bob Russell (Colchester) voted against the VAT changes.

Mr George appeared to have voted both ways.

Shadow chief secretary to the Treasury Liam Byrne urged Coalition MPs to vote for a Labour-backed amendment calling for the VAT hike to be postponed until its impact on vulnerable groups was assessed.

Speaking after last night's vote, he said: "Tonight, we set a fairness test for Coalition MPs and they comprehensively failed it.

"In the last few days we've exposed how Britain's pensioners face an £8 billion VAT bill and how charities will be hit for millions of pounds.

"Tonight we gave Lib Dem and Tory MPs the chance to vote for a plan that would have protected pensioners and charities and they didn't have the guts to back us.

"It is the most extraordinary betrayal of Britain's most deserving.

"Tonight, all Labour MPs are being issued with details of how Lib Dem and Tory MPs in their region voted, along with a breakdown of the number of pensioners in their local authority area and region, and the VAT hit pensioners and charities now face.

"We will now take the fight to the constituencies of all the Coalition MPs who voted to press on, full speed ahead, with the unfair VAT hike for which they have no mandate."

Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
Life and Style
food + drink
John Profumo and his wife Valerie Robson in 1959
voicesWard committed no crime, and the truth is still being covered up, writes Geoffrey Robertson QC
Have you tried new the Independent Digital Edition apps?
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
news... you won't believe how bad their skills were

Arts and Entertainment
Mark Wright and Mark Wright
tvStrictly goes head-to-head with Apprentice
footballPremier League preview: All the talking points ahead of this weekend's clashes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas