Green Party

Labour and Green councillors at a Norwich City Council meeting last night united to pass a motion [1] criticising the coalition Government's plans for a VAT increase. They said it would hit poor people in Norwich the hardest.

The motion pointed out that the poorest fifth of people pay around twice as much in VAT as the richest fifth [2], as a proportion of their income. 10.5% of households in Norwich have an income below £10,000 a year - far more than the national average at 7.1% [3]. Greens argued that VAT is a blanket tax that is regressive because of the impact it has on poor households.

Councillor Adrian Ramsay spoke on the motion for the Green Party. He referred to a report co-authored by Green Party Leader Caroline Lucas MP which sets out alternative ways of dealing with the deficit.

Councillor Ramsay, who is Deputy Leader of the Green Party nationally, commented: "The coalition Government's package will not create a fair society or a healthy economy, but as Caroline Lucas' report shows, there are alternatives. Around £100bn per year is lost in tax loopholes exploited by the rich. More effort should be made to recover this money, protecting public sector jobs in tax offices. Increasing income tax for the highest earners would also be a fairer way of bringing money into the public coffers than raising VAT. We could use the taxation system to tackle those problems that caused the financial crisis in the first place by taxing high-risk transactions between banks with the Robin Hood tax, rather than simply hitting the poorest people the hardest with a VAT increase.”

Conservative and Lib Dem councillors voted against the motion, claiming that a VAT increase is necessary, but Adrian Ramsay said that the Green Party would replace VAT with eco-taxes, targeted at the most environmentally damaging consumption.

Notes:

[1] The motion is available in full on the council website: http://www.norwich.gov.uk/webapps/meeting_minutes/Meetings.asp?meeting=specific&mid=2190&id= . It resolves to write to the chancellor of the exchequer raising concerns about the proposed VAT increase and request Norwich's 2 MPs vote against the Finance Bill.

[2] Office for National Statistics: http://www.statistics.gov.uk/StatBase/ssdataset.asp?vlnk=9614&Pos=1&ColRank=1&Rank=272

[3] From Norwich City Council web site: http://www.norwich.gov.uk/site_files/pages/City_Council__Key_Statistics.html

[4] View report: http://www.financeforthefuture.com/TaxBriefing.pdf

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