Exeter City Council notes:
That the increase in VAT from 17.5% to 20% announced in the Government’s June budget will fall hardest on those least able to afford it.
That the increase in VAT will lead to higher prices for goods and services; will have a disproportionate impact on pensioners and other low income groups; and will have a severe impact on businesses, charities and community groups in Exeter.
That the effect of the increase in VAT, when taken with other measures in the Budget, will be unfair to pensioners, who have not had a compensatory increase in other benefits and allowances.
That the way the VAT increase will affect pensioners and other low income groups runs counter to the Government’s Coalition Agreement statement on 20 May 2010 that it would “ensure that fairness is at the heart of those decisions so that all those most in need are protected”
That the Institute of Fiscal Studies has stated that the VAT increase was not “unavoidable”, as the Chancellor of the Exchequer said in his Budget speech.
and Council resolves:
To write directly to the Chancellor of the Exchequer raising concerns about the impact of the proposed VAT increase on pensioners, other vulnerable groups and businesses in Exeter.
To call on the Members of Parliament representing the City of Exeter to stand up for Exeter’s pensioners, businesses and wider community, to voice their opposition to this unfair increase in VAT and to vote against it in Parliament.
Minutes:
In accordance with Standing Order 6 Councillor D Baldwin, seconded by Councillor Sterry, moved a Notice of Motion in the following terms:
“Exeter City Council notes:
That the increase in VAT from 17.5% to 20% announced in the Government’s June budget will fall hardest on those least able to afford it.
That the increase in VAT will lead to higher prices for goods and services; will have a disproportionate impact on pensioners and other low income groups; and will have a severe impact on businesses, charities and community groups in Exeter.
That the effect of the increase in VAT, when taken with other measures in the Budget, will be unfair to pensioners, who have not had a compensatory increase in other benefits and allowances.
That the way the VAT increase will affect pensioners and other low income groups runs counter to the Government’s Coalition Agreement statement on 20 May 2010 that it would “ensure that fairness is at the heart of those decisions so that all those most in need are protected”.
That the Institute of Fiscal Studies has stated that the VAT increase was not “unavoidable”, as the Chancellor of the Exchequer said in his Budget speech.
and Council resolves:
To write directly to the Chancellor of the Exchequer raising concerns about the impact of the proposed VAT increase on pensioners, other vulnerable groups and businesses in Exeter.
To call on the Members of Parliament representing the City of Exeter to stand up for Exeter’s pensioners, businesses and wider community, to voice their opposition to this unfair increase in VAT and to vote against it in Parliament.”
In presenting the Notice of Motion, Councillor D Baldwin stated that VAT was an unfair tax which caused disproportionate hardship to lower income families and older people. She considered that this proposal of the Coalition Government destroyed the credibility of those politicians who had formerly voted against a rise in VAT. In supporting the Motion, other Councillors drew attention to how the tax discriminated against particular sectors of society which did not necessarily enjoy choice as consumers, such as the unemployed and women.
Members referred to the impact of massive unpaid taxes that had been avoided or evaded as well as the money that had been deployed on funding wars. They commented on the ambiguous attitude of those politicians who had formerly opposed VAT and who were now advocating the VAT increase. They urged the Council to stand up for the local community and those vulnerable members of society whom they had been elected to represent.
Other Councillors emphasised the need for the current Government to tackle the economic legacy of the former Government, including the impact of high borrowing levels and the banking crisis. They referred to the benefits of the increased level of personal allowances and state pension. They reported that the increase would bring Britain into line with many other European countries and considered that the proposed rise in VAT was preferable to higher income tax or mortgage interest rates. They identified the range of basic goods such as children’s clothes, food and books which were exempt from VAT.
In accordance with Standing Order 27(1), a named vote on the Motion was called for, as follows:
Voting for:
Councillors Baldwin, Branston, Mrs Danks, A Hannaford, R Hannaford, D Morrish, Mrs Morrish, The Deputy Lord Mayor Councillor Sheldon, Sterry and Wardle
(10 members)
Voting against:
Councillors P Brock, Coates, Cole, Fullam, Hobden, Mitchell, Newby, Newcombe, Prowse, Shiel, Taghdissian, Mrs Thompson, Wadham and Winterbottom
(14 Members)
The Notice of Motion was lost.