Finance Bill

I explained at the beginning of my speech that the whole approach of a fixed-term deficit consolidation plan was wrong. I explained the same thing to the Labour party when it was in power. I want to see a medium-term deficit consolidation plan which, over the first 12 to 15 years, will give us £50 billion of savings on Trident and its replacement—an approach in which the Liberals believed only a few short weeks ago. We have a very credible alternative plan. The amendments and the new schedules were tabled to the Fiscal Responsibility Bill, and I am sure that the hon. Gentleman remembers that debate extremely well. My party disagrees with the approach that is being taken. This rise is the most damaging bit of the approach, because not only is it socially and economically wrong, but it disproportionately affects the poorest families. I shall quote briefly from the Save the Children report, because it sums this up best. The report states:""Families living in poverty already pay a premium for goods and services. They are more likely to have prepayment meters, live in an area without...cash machines and have pay-as-you-go mobile phones"" and so on, and says that there is already""a 'poverty premium' of more than £1,000 a year. Any increases in taxes that affect those on low incomes, particularly VAT, would disadvantage low income families even further."" That report is extremely well put together and incredibly credible, and I support it entirely. Its assessment of the damage that will be caused is right. It cannot be right that the very poorest in society, who are already paying a poverty premium, should be forced to take on the bulk of the cost of a fixed-term deficit consolidation plan. In particular, the £13 billion a year take in VAT is socially irresponsible and economically damaging and, most of all, hurts those at the bottom of the pile. We will be delighted, if it is possible later today, to press amendment 13 to a vote.