date: 11 June 2010
embargo: 00.01hrs Monday 14 June 2010
Increasing VAT in the emergency Budget would hit the poor more than the rich, cost small firms more than big ones, threaten retail jobs, increase tax avoidance and boost inflation, which could in turn lead to higher mortgages, according to a new TUC briefing published today (Monday).
The briefing, available at www.tuc.org.uk/VAT, says that while tax increases should play a more significant part in deficit reduction than the Chancellor plans, VAT is one of the least progressive ways to do this, as:
TUC General Secretary Brendan Barber said: 'The Chancellor should resist the temptation to be VATman when he presents his Budget. VAT increases don't just hit the poor more than the rich, they also hit small firms, threaten retail jobs and by boosting inflation could also lead to higher interest rates.
'There are much fairer ways to raise revenue such as a Robin Hood Tax on financial transactions and Capital Gains Tax. The only VAT changes the Chancellor should contemplate are ending the zero rates on private healthcare and education that only the rich can afford.'
NOTES TO EDITORS:
- All figures are taken from the TUC briefing except the household costs of VAT, which are taken from http://www.statistics.gov.uk/elmr/08_09/downloads/ELMR_Aug.pdf. According to the Office for National Statistics, the poorest fifth of households pay 12p in VAT for every pound of disposable income they spend, while the top fifth pay just 6p.
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Press release (500 words) issued 14 Jun 2010
This page http://www.tuc.org.uk/economy/tuc-18058-f0.cfm
printed 19 May 2013 at 16:18 hrs by 18.104.22.168