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Labour betrayal over temporary VAT cut

29/06/2022

Plaid Cymru’s Treasury spokesperson Jonathan Edwards MP has today lambasted Labour MPs for their “complete betrayal” over refusing to vote to temporarily reduce VAT.

A Plaid Cymru-led move to reduce the VAT rate to 17.5% for a limited amount of time to help struggling families and small businesses was defeated in the House of Commons last night.

This comes despite numerous protestations over the past weeks from shadow Chancellor Ed Balls and other frontbench Labour figures that a temporary cut in VAT is desperately needed.

Mr Edwards stated clearly in the Commons that the amendment would have decreased the rate of VAT via a special provision which allows the Government to change the rate of VAT, and the rates of other indirect taxes.* The vote was lost by 293 noes to 10 ayes.

This follows a similar u-turn last year when Labour claimed to be against the Conserative-Liberal Democrat VAT hike to 20% but abstained when the issue was voted on.

Plaid Cymru Treasury spokesperson Jonathan Edwards MP said:

“This new level of hypocrisy from the Labour party is jaw-dropping.

“One minute they’re arguing for a temporary VAT cut – and then when the moment presents itself – they sit on their hands.

“Abstaining is as good as letting the vote go through. Perhaps we shouldn’t be surprised though as the same thing happened last year. They said they were against the VAT hike to 20% but yet again abstained.

“What makes the betrayal so much worse is the fact that the Shadow Chancellor and the Shadow Minister for Wales both very publically backed a temporary cut in VAT. They have lost all credibility on this issue and the people of Wales are set to suffer this added burden on top of the UK Government’s cuts agenda.

“Labour’s economic policy is a complete shambles and has played completely into the hands of the Tories and LibDems.

“VAT is a highly regressive tax which hurts the most vulnerable in society.

“With economic growth struggling, and VAT being a major factor in the well above target inflation, a temporary cut in VAT would have helped families under financial pressure.”