Finance Bill

That intervention, and the right hon. Gentleman's amendment, would have rather more moral force behind them if that had been his party's practice when it was in office. I well remember the Budget of 2006 or perhaps 2007, when the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), as Chancellor, doubled the income tax rate paid by the poorest in society from 10% to 20%. I was among those Liberal Democrats who vigorously pointed that out, and our then leader, my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell), was the first Member to point out that the tax charge would fall very heavily on the poorest in society. I remember the whooping from Labour Members because that measure was being put in place to fund a tax cut for the well-off. I remember them cheering the cut in capital gains tax—now, of course, they say they are against it—which was being paid for by the poorest in society. This Government—this Liberal Democrat-Conservative coalition—are protecting the lowest-paid in society and taking them out of income tax, rather than increasing the rate they pay. Amendment 40, tabled by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), certainly has some merits in terms of looking at the scope of VAT. When I was in opposition I often made a plea, as did colleagues, for a reduced rate of VAT on certain goods and services, such as contraceptives. There was also the important issue of the construction industry and whether it was right that VAT be charged in full on the repair and maintenance of housing stock—most of our housing stock is old—yet be zero-rated on the construction of new dwellings. So we have had these debates before, and it would be a useful exercise in its own right to examine the scope of VAT rates—but not as a delaying tactic against tackling the deficit now. As I have said in response to many interventions, the Budget is a balance between what we do on expenditure and taxes, and where we choose those taxes to bite and fall. This Budget, put together by a coalition, by a new mode of politics, has struck that balance fairly. Some of the decisions within the Budget would be unpalatable on their own, but they are not being taken on their own. The VAT increase is not a measure in isolation, but one we must contemplate in the context of the rest of the Budget. That is why my colleagues and I will resist these amendments if they are pressed to a vote.