2.5% VAT hike is regressive, claims Durkan

He said: “Last June, I seriously questioned George Osborne’s decision to increase VAT from 17.5 per cent to 20 per cent which I firmly argued would hurt those who are less well-off most – not least here in Derry but elsewhere in Northern Ireland.

“I am very worried that the rise in VAT will hurt many people.

“Those who are less well-off have less disposable income and fewer choices about spending.

“It is they who must spend what little they have on necessary goods and services and this increase in VAT will leave them struggling further.

“A reflective analysis produced by the Institute for Fiscal Studies in September also confirmed what I and others said in debates on the budget – that the measures taken by the government will undoubtedly hit the poor harder than the rich.”

The Foyle MP said

that the Chancellor’s decision to increase VAT and his “squeeze on welfare” strongly challenged his claims to have delivered a “tough but fair” budget.

“When the government claimed it had produced a progressive budget we argued that it was clearly regressive, making the poor carry far more of the burden of deficit reduction,” said Mr Durkan.