George Osborne

George Osborne Increases VAT to 20%

The new coalition government has just announced their regressive tax increases for hard working families the length and breadth of this country, the measures introduced today will impact on lower income households. The headline increase is surely that of VAT from 17.5% to 20% from 4th January 2011 – over the last 40 years only a Conservative government has increased VAT. Thatcher increased it from 8% to 15% and John Major increased it further to 17.5%, and now we see David Cameron and George Osborne increasing VAT even further to a staggering 20% rate, which is the most regressive tax increase in the last twenty years. This will be the new governments Achilles Heel – in the weeks leading up the election David Cameron and Nick Clegg both announced neither had plans to increase VAT.

The new taxes introduced today put the economy at risk when we are still teetering on the edge with growth remaining worryingly stagnant, there is every possibility the economy could slip back into recession. What we got today from this new coalition government was the carpet pulled out from under the feet of the poorest in the country; housing benefit will be capped putting the most vulnerable at risk, disability living allowance will be means tested by 2013 and child benefits to be frozen for the next three years, while corporation tax will be cut every year for the next three years putting more money in the pockets of businessmen across the country.

The government claims to be progressive yet everything announced today is regressive, backward looking and short sighted.

Join the forum discussion on this post

Leave a Reply

You must be logged in to post a comment.