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
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Customer Service Assistant

£13500 - £15000 per annum: Recruitment Genius: A Customer Service Assistant is...

Recruitment Genius: Sales Executive - OTE £35,000

£16000 - £35000 per annum: Recruitment Genius: An ambitious and motivated Sale...

Recruitment Genius: Gas Installation Support Engineer

£20000 - £23000 per annum: Recruitment Genius: A Gas Installation Support Engi...

Recruitment Genius: Gas Installation Engineer

£29000 per annum: Recruitment Genius: A Gas Installation Engineer is required ...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence