Carmichael joins Lib Dem call to save families £600 on VAT


The Liberal Democrats are today calling for emergency action to save families money on their bills with a temporary cut to VAT. Under the plan, the standard rate of VAT would be reduced from 20% to 17.5% for one year, a move that would save isles households an average of around £600 each. The plans were set out by Liberal Democrat Leader Ed Davey at the party’s Spring Conference this weekend and have been backed by Orkney and Shetland MP, Alistair Carmichael.

It comes amid warnings that the war in Ukraine will worsen the cost of living pressures facing households, with energy, food and fuel bills all expected to rise. Inflation is also forecast to reach 8% in April, its highest level in decades.

The Lib Dem 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 emergency change to VAT could be introduced quickly and easily by the Chancellor for one year. The 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.

Mr Carmichael said:

“The Conservative cost of living crisis is hitting families hard and it is likely to get worse in the coming months. People across the country and in the isles are worried about how to make ends meet as bills go through the roof.

“An emergency cut to VAT – easily enacted – would offer a massive boost to people feeling the pinch by putting money back into their pockets. It would also support shops, cafes and restaurants by giving confidence and boosting spending on the high street as we come into the tourist season.

“This is crunch time for the Chancellor and the Conservatives. It is time for them to back away from their unreasonable tax hikes and give families a respite in these challenging times.”

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.”


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