Nearly 40,000 pensioners across the Borough of Stockton (125,000 in the Tees Valley) will suffer under the coalitions’ decision to raise VAT to 20% according to statistics revealed today.
The increase was passed by the House of Commons despite the fact that neither Party had a mandate to do so, and the Liberal Democrats had specifically campaigned against it during the General Election campaign.
Stockton North Labour MP, Alex Cunningham, who opposed the tax rise said the coalition was determined to introduce taxes which will hit the most vulnerable in our communities: “It is amazing that the Liberal Democrats could happily troop through the voting lobby to vote for this tax rise only weeks after warning the public about the Tory VAT bombshell. Yet again they are allowing themselves to be used to carry out the Tories’ dirty work.”
The Commons vote came as new research showed Britain’s pensioners will be stung by an £8 billion VAT bill over the course of this Parliament.
Worse, figures hidden in the Budget show that local pensioners will be hit every year by changes that hit them in the pocket;
- From January, pensioners will face a £400 million VAT tax bill which they will have to start paying months before any increase in the Basic State Pension. Pensioners face paying nearly £8 billion in VAT over the parliament.
- In 2011, weekly pension increases fall behind VAT-fuelled price rises.
- In 2012, pension rises fall behind price rises again, after the Treasury quietly changed the way the so-called ‘triple lock’ up-rates pensions in practice.
- By 2013, pensioners face cuts to Disability Living Allowance benefits, which may total £350 million a year by the end of the Parliament, alongside cuts to Housing Benefit and the lower uprating of public service pensions and benefits.
Alex had hoped to protect local pensioners by supporting an amendment to the Finance Bill which would have delayed the VAT increase until a proper plan for shielding pensioners was in place. But Liberal Democrat and Tory MPs ganged up to block the move.
Alex said: “This is a betrayal of our local pensioners by the Tory-Liberal government. Our retired community has paid in for a life-time and is now being hit hard in the pocket.
“I wanted a plan in place to protect local pensioners from the £8 billion VAT bill but the Liberal Democrats refused to help.
“I can’t believe the Tories and Liberals are trying to disguise the tax bill with a few promises which on closer inspection just don’t add up. The Budget small print says pensioners keep up on getting hit every year with a host of Treasury tricks”.