Finance Bill

A point made clearly in the debate by a great many people is that each time a Budget comes to the House, the taxation system can be looked at and changed. This Budget tackles today's problems: if deficits fall, revenues are there and the balance comes in, we can look to changing that approach. Looking back into the mists of time, people forget that over the 18 years of the last Conservative Government, taxation was reduced overall, but in the early part, in the late 1970s and early 1980s, taxation had to rise to tackle the deficit. As time moved on and circumstances allowed, overall taxation on people was reduced. The hon. Gentleman makes a sensible point, but we would need to consider matters as each Budget came forward. This is the first Budget of a five-year Parliament, and it set out to tackle a specific issue. I did some research on this matter, and the Library told me that VAT is applied to only 50% of consumer goods that are bought by the public, so the VAT rise is far less regressive than a rise in income tax, for example—[Hon. Members: "What!"] Absolutely. People have no choice but to pay their taxes, whereas they can make choices about what they pay VAT on. We come back to the question of which pensioners we are talking about. Are we talking about the pensioners who go out and buy cars or those who go out and buy the food on which VAT is not charged?