Ian has slammed the Liberal Democrats and Tories for voting against a plan to protect local pensioners from the VAT hike. The Commons vote came as new research showed Britain’s pensioners will be stung by an £8 billion VAT bill over the course of this Parliament. There are over 77,000 pensioners in the City of Edinburgh, all of whom could be affected. Worse, figures hidden in the Budget show that local pensioners will be hit every year by changes that hit them in the pocket;
• From January, pensioners will face a £400 million VAT tax bill which they will have to start paying months before any increase in the Basic State Pension. Pensioners face paying nearly £8 billion in VAT over the parliament.
• In 2011, weekly pension increases fall behind VAT-fuelled price rises.
• In 2012, pension rises fall behind price rises again, after the Treasury quietly changed the way the so-called ‘triple lock’ up-rates pensions in practice.
• By 2013, pensioners face cuts to Disability Living Allowance benefits, which may total £350 million a year by the end of the Parliament, alongside cuts to HousingBenefit and the lower up rating of public service pensions and benefits. Ian Murray MP last night sought to protect local pensioners by supporting an amendment to the Finance Bill which would have delayed the VAT increase until a proper plan for shielding pensioners was in place. But Liberal Democrat and Tory MPs ganged up to block the move. The City of Edinburgh’s 77,000 pensioners will now start paying their share of £33 million extra in VAT a month starting in January. Ian Murray MP said: “This is a betrayal of our local pensioners by the Tory-Liberal government. Our retired community has paid in for a life-time and is now being hit hard in the pocket. “I wanted a plan in place to protect local pensioners from the £8 billion VAT bill but the Liberal Democrats refused to help. I can’t believe the Tories and Liberals are trying to disguise the tax bill with a few promises which on closer inspection just don’t add up. The Budget small print says pensioners keep on getting hit every year with a host of Treasury tricks”.