Welsh Liberal Democrat MPs Roger Williams and Mark Williams have written to Chief Secretary to the Treasury, Danny Alexander asking for the impact of the VAT rise to be assessed and measures to mitigate the effect in some areas to be adopted.
Both MPs put their name to an amendment tabled by St. Ives MP Andrew George calling for an impact assessment of the increase in VAT to 20%, but the amendment was not called.
In particular, they have highlighted the impact on rural areas, where the lack of public transport, which is zero-rated, means that people have no alternative but to use cars, and they will face the effect of a 2.5% VAT increase on the cost of driving.
They also point out the increasing discrepancy between the VAT rate on new build and refurbishment, which will provide an even greater financial incentive to favour new build over refurbishment.
They further highlighted the impact of the rise in VAT on charities, which is expected to cost them around £250 million, at a time when there is a great pressure on the voluntary sector.
Welsh Liberal Democrat MP for Brecon and Radnorshire Roger Williams said:
“We know that the Coalition Government faced a tough task in ensuring that we are able to cut the deficit without hitting the poorest, but we are worried about the proposed increase in VAT.
“We are particularly concerned about the impact on the voluntary sector, which is particularly hard-pressed at the moment, and rural areas due to the additional cost of fuel.
“We need to carry out this work so that we can lessen the impact of any increase in VAT.”
Ceredigion MP Mark Williams added:
“Many people are concerned at the impact that this will have on their budget or on their business, and it is absolutely right that the Government should heed those concerns and do what they can to mitigate the impact.
“We recognise that this was a tough budget to deliver, and that Labour left the Government in an impossible position, but the coalition has to be prepared to listen to genuine concerns, and ensure that we do put forward a budget that deals with the deficit while protecting the poorest in our society.”
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