Shadow Secretary of State for Scotland Jim Murphy is today writing to every Lib Dem MP in Scotland urging them to vote against the rise in VAT to be debated in the House of Commons this week. (Scroll down for the letter.)
It is expected that the vote may come as early as Tuesday, and Labour has ensured that MPs will vote on a specific amendment. During the election campaign, the Lib Dems promised to oppose a rise in VAT and themselves launched a campaign against it.
The rise in VAT will hit Scottish families will an annual bill of about £400, but will disproportionately affect poorer families who spend a higher percentage of their weekly income paying household bills.
Official figures released to the Scottish Parliament show that the change will cost the NHS in Scotland nearly £27 million a year, whilst costs to local government are believed to be uncalculated.
Shadow Secretary of State Jim Murphy MP said:
"I am writing to Scotland's 11 Lib Dems because I don't think any of them genuinely believe raising VAT is right for Scottish families.
"The three Scottish Lib Dem ministers are there to be Scotland's voice in government, not the other way round. I would urge Lib Dem MPs to vote with their conscience not the coalition.
"I know there are many senior Liberal backbenchers who privately say it is regressive and not needed to get the deficit down in a fair way.
"This is the first big vote of the new Tory-Lib Dem government and Scotland will never forgive the Lib Dems if they act as human shields for the Tories, putting power before principle, ministerial Mondeos before what is right for Scotland.
"No-one voted Lib Dem so that the Lib Dems could vote for a Tory tax against the poor."
Labour MP for East Lothian Fiona O’Donnell added:
"We know that every family in Scotland will be hit by the VAT rise, and the poorest families will feel the hurt the most. But the impact on small businesses cannot be underestimated. In every part of Scotland, there are small, local businesses who are now facing an additional cost for buying and selling pretty much everything they need to survive.
"This will damage economic growth and risk jobs. The Liberals and Tories were right when, before the election, they warned of the dangers of this regressive tax. Now they are the government they should have the courage of their convictions.
"If they weren't determined to cut the deficit faster than is needed, families and employers wouldn't be facing this multi-billion pound bill."
Scottish Labour's Shadow Health Secretary Jackie Baillie, MSP, added:
"The health service will now have to pay a Lib Dem-Tory premium for almost every item it purchases.
"We know that the cost to the NHS in Scotland will be £27 million - a sum which could employ over 1,350 nurses.
"The tragedy is that we are already seeing SNP nursing cuts on that scale, before the Tory cuts have even kicked in.
"These extra cuts and costs will affect patient care, and that is unforgivable."
Scottish Labour's Local Government Spokesperson Michael McMahon, MSP, warned:
"We know the cost to the NHS runs into the millions, but the exact cost to local government is unknown could be even higher. This is a grossly unfair tax which hits the poorest but also stifles economic growth.
"Local councils are already feeling the pinch from the SNP, constantly being asked to do more for less. This additional burden from the Lib Dems and Tories will make things worse.
"There are hundreds of Lib Dem councillors in Scotland and I urge them to do everything they can to speak up. Many Lib Dems have genuine and real concerns about this, and they cannot stay silent while their colleagues hit the poor to pay for their seats in the Cabinet."
ENDS
Text of the letter from Jim Murphy to all Scottish Lib Dem MPs:
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House of Commons VALUE ADDED TAX AND THE POOREST PEOPLE IN SCOTLAND Next week all of us will be asked to vote on whether or not to increase VAT to 20%. I am asking you to vote with your conscience, not the Coalition. I know that in asking you to vote against the Coalition, I am asking a lot of you but am doing so in order that together Scotland's MPs can protect the poorest people in society. There is no doubt that poorer people and pensioners will be hit hardest by a VAT rise. Indeed, your party leader Nick Clegg made this clear on 7 April 2010 when he described VAT as a "regressive" tax. The following day he told people that: "our plans do not require a rise in VAT." On a campaign visit to Scotland, and standing beside Tavish Scott, he warned that: "the only way that they [the Tories] are going to deliver their tax promises is by dropping a tax bombshell, a VAT bombshell of £389 a year on every household in this country." Even in the last month, your party’s Deputy Leader Simon Hughes has confirmed they understand just how regressive a tax VAT is in penalising the poor, saying on 15 June that: "I hope we don’t have a VAT increase because it is the most regressive form of tax, it penalises the poor at the same rate as the rich." Your party’s coalition partners, the Conservatives, repeatedly denied that they had plans to raise VAT. On 10 April, George Osborne said: "we have no plans to increase VAT." Indeed, on 9 May 2009 David Cameron said: "you could try as you say put it on VAT, sales tax, but again if you look at the effect of sales tax, it’s very regressive, it hits the poorest the hardest. It does, I absolutely promise you. Any sales tax, anything that goes on purchases that you make in shops tends to… if you look at it, where VAT goes now it doesn’t go on food obviously but it goes very very widely and VAT is a more regressive tax than income tax or council tax." I hope that in the vote this week, you will join with me in voting against raising VAT. Like you, I know it will hurt families. Like you, I know it will hurt pensioners. And like you, I know it is not a progressive tax. Like you, I know that there are Scottish families in all our constituencies who will be forced into poverty by the £400 bill you are imposing on them. Like you, I know there are pensioners who will be forced to choose between going cold this winter, or paying extra VAT. I am sure that is not why you came into politics, or why you joined the Liberal Democrat party. I am not asking you to join with me and other Labour MPs to cause political embarrassment to the Coalition. This is not a party political exercise. This is a real life issue. The new politics, if it means anything, must mean that people like you should be prepared to do the difficult thing in order to stand by those people who need our support the most. I hope to see you in the division lobbies this week. Yours sincerely Jim Murphy Shadow Secretary of State for Scotland
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