Cut VAT to save families in Badenoch and Strathspey constituency nearly £17m say local Lib Dems
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Highland Liberal Democrats have demanded an emergency cut to VAT to protect local families from soaring bills and the worsening cost of living crisis.
The Lib Dems are calling for the standard rate of VAT to be reduced from 20 per cent to 17.5 per cent for one year.
The party has said the move that would save households in Badenoch and Strathspey an average of around £600 each.
This would mean putting around £17m back in the pockets of 28,200 families across Inverness, Nairn, Badenoch and Strathspey.
The plans were set out by Liberal Democrat Leader Ed Davey at the party’s Spring Conference this weekend and have been backed by Declan Gallacher, the Liberal Democrats candidate for Badenoch and Strathspey.
It comes amid warnings that the war in Ukraine will increase the cost of living on households with energy, food and fuel bills all expected to rise.
Inflation is also forecast to reach 8 per cent in April, its highest level in decades.
The Lib Dems believe their plans would support the economy by boosting spending at local high streets.
The proposals would also be expected to keep inflation down by making the prices of everyday items lower than they would have been.
The Lib Dems said the emergency change to VAT could be introduced quickly and easily by the Chancellor for one year.
Highland Liberal Democrats have said he should use the Spring Statement coming up on March 23 to bring forward the change as well as scrapping the Conservative’s National Insurance tax hike, to bring much-needed respite to local families.
Liberal Democrat Declan Gallacher, the party's candidate for Highland Council elections for Badenoch and Strathspey, said: “The Conservative cost of living crisis is hitting families hard and getting worse.
"People across our community are worried about how to make ends meet as bills go through the roof.
“An emergency cut to VAT would put £600 back into the pockets of hard working families across Badenoch and Strathspey.
"This would really help them out at the moment, and would also support our treasured shops, cafes and restaurants by boosting spending on the high street.
“This is crunch time for the Chancellor and the Conservatives. Will they hit families with another unaffordable tax rise? Or will they do something to stop it?”
Liberal Democrat Leader Ed Davey said: “This is a once-in-a-generation crisis, and the government must step up to help struggling households and businesses on the brink. Instead of clobbering struggling families with a tax hike, the Chancellor should be putting money back into their pockets.”
When the last VAT cut came in in December 2008, inflation fell from 4.1 per cent to 3.1 per cent.
Reducing VAT to 17.5 per cent would require a very short and simple statutory instrument.
The standard VAT rate can be changed by up to 25 per cent for up to a year through secondary legislation.
This means no new primary legislation is required unless the cut needs to stay for longer than a year.
