The Tory / Liberal hike in VAT from 17.5% to 20% on 4th January 2011 will hit low paid families hardest according to Falkirk West SNP MSP, Michael Matheson.
Both the Tories and Liberals claimed in the election campaign that they had no plans to increase the rate of VAT but weeks into the coalition government’s term of office the London Government announced that the tax on goods will rise by 2.5%.
Said Michael Matheson,
“VAT is a regressive tax that hits the poorest paid hardest which is why the Tories and Liberals are so enthusiastic for the hike.
It hasn’t taken long for both of these parties to show their true colours with their targeting of ordinary families for the mess made by their chums within the Financial Sector.
As well as bad news for local families the Tory / Liberal hike in VAT is bad news for local businesses already hit by the London recession. This tax hike will hit businesses hard and will cost countless local jobs.
The increased VAT rate is also a disaster for public services. The NHS in Scotland will lose over £34m alone with Falkirk Council also footing an increased tax bill that should be invested in local services or the local economy.”
Just before Christmas the Falkirk Herald came out in support of the Labour campaign to increase the Council Tax. With the increase in VAT coming on top of the news that the planned 1% increase in National Insurance dating back to the last Labour budget and due on 1 April the SNP’s decision to freeze the Council tax for a 4th year running looks like the only relief hard working families will receive this year.