Will the VAT changes boost Watford's economy? (Watford Liberal Democrats)

Watford Liberal Democrats <info@watfordlibdems.org.uk>

Will the VAT changes boost Watford's economy?

November 25, 2008 12:00 AM

Sal Brinton with Lib Dem Shadow Chancellor Vince Cable MP.

Will low and middle income families in Watford find that the 2.5% reduction in VAT make any difference to them?

A family trip to the cinema for four at Woodside paying £21.80, will save 46p;
A meal out for two at a restaurant with wine and service costing £50 will see a saving of £1.06;
A round of drinks for four costing £10 will save 21p;
A new digital camera (Sony W130) costing £129.99 will save £2.77.

But Watford Liberal Democrats say that the VAT change will not help those families struggling to pay increased mortgage costs, rising food prices and large energy cost hikes.

Sal Brinton, Parliamentary Candidate for Watford said "local residents are getting in touch with me because they are finding it difficult to manage with their basic essential costs: this reduction in VAT will only help those on higher incomes who can afford to spend more. What we need to see is a permanent change to the tax system making it fairer by cutting income tax for those on low and middle incomes, paid for by getting rid of tax loopholes for the wealthy."

Commenting on Monday's Pre-Budget Report, Liberal Democrat Shadow Chancellor, Vince Cable MP said:

"The Government acknowledges that the UK tax system is inherently unfair, but then announces that it will hit those struggling to make ends meet with yet higher tax bills by increasing National Insurance. Everyone earning over £19,000 will be hit. The new 45p Income Tax rate is nothing more than a fig leaf to cover a £5bn tax hike which will hit millions of low earners and businesses. At a time of economic emergency, Gordon Brown has once again failed those who need help the most."