The government last night saw off calls in Parliament to scrap its planned rise in VAT to 20% from next January. A Labour-backed amendment calling for the move to be delayed pending an assessment of its impact on vulnerable groups was defeated. Ministers have said the tax rise is "unavoidable" to reduce the deficit. In a further vote, MPs approved the VAT rise by 321 to 246, a government majority of 75.
"We had to raise VAT because there was no money left”
David Gauke, Treasury minister
A proposed amendment to the Finance Bill by the SNP and Plaid Cymru, which would have prevented the increase, was defeated by a majority of 295. A Labour-backed amendment calling for the move to be delayed pending an assessment of its impact on vulnerable groups was also defeated. Chancellor George Osborne has said the planned rise in the main rate of VAT from 17.5% to 20% is estimated to raise £13bn towards reducing the £155bn deficit.
