Finance Bill

The hon. Gentleman raises an important question. The answer is that I do not know. It is a mystery. The Budget scorecard has a certain number, but of course it has bundled together the revenue that is to be raised from the increase in the higher rate and the increase in the standard rate. I hope that the Minister will be able to enlighten us. It is possible to deduce why the higher rate has gone up, but it is curious that the Government have chosen to increase the standard rate. We have to assess that decision alongside the decision to preserve exemptions and zero-rating from VAT on a range of goods and services. We were told on Tuesday night by the Economic Secretary that the existing zero ratings and exemptions would be kept in place for the course of this Parliament. That commitment was given to the House on Tuesday night, and we will all watch the Government's adherence to it with a great deal of attention over the next few years. That decision to keep in place a series of zero ratings and exemptions just adds to the mystery of why this standard rate has been singled out for such an enormous rise. The hon. Member for Christchurch raised an important point. The Budget scorecard shows that the overall increase in VAT brings about £54 billion into the Exchequer over the course of this Parliament. That is an extraordinary amount of money. Eight billion pounds of that will be paid for by our country's pensioners. The scorecard also shows that a further £2 billion is brought in over the Parliament by the increase in IPT, but we are not told how much will come in from the respective increases in the standard and higher rates. True to form, the Government certainly have not told us what the impact of the IPT increase will be. I would therefore like to say a little about what the House of Commons Library and other sources are able to tell us about the impact of the increase. I am afraid that one of the groups that will be hit hardest by the increase is, once again, our country's pensioners. That was the group that Liberal Democrat and Conservative Members refused to protect when given the chance by Labour amendments on Tuesday night. We established in Tuesday's debates that pensioners would pay £8 billion in extra VAT. The figure was not challenged by the Government. Today I can tell the Committee that it appears that pensioners will be hit by a further £355 million over the course of the Parliament. The House of Commons Library note—I am happy to release it more widely—allocates the revenue raised from the IPT increase between pensioner and non-pensioner households. I am grateful to the Library for this excellent work. It says that, according to Office for National Statistics figures, pensioners account for about 18% of spending on insurance in this country. The scorecard scores 115, 455, 445, 455 and 455 in increased revenue over this Parliament from the increase in IPT, so the Library estimates that £21 million will be raised from pensioners in 2010-11. Pensioners will pay that without any recompense in the form of extra pension credit or increased basic state pension; those increases do not kick in until a little later in the year. In subsequent years our pensioners will pay about £84 million a year more in IPT—in total about £355 million over the course of this Parliament. Hon. Members will be concerned about that.