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Finance Bill

My hon. Friend has posed a question for the Financial Secretary, who is now back in his seat; I am sure that his colleagues will brief him so that he can provide a proper answer. My point is that the Government seem set on failing to provide sufficient university places to school leavers this summer. The ranks of the unemployed may well be swollen by young people unable to get into university because the Government have not provided adequate funding. I move on to consider briefly one or two other factors that may have more significant impact than the VAT cut: I am thinking of the consequences of the reduction in interest rates. In the past 12 months or so, the base rate has declined tenfold from 5 to 0.5 per cent. That will undoubtedly provide a significant increase in disposable income to households that have tracker or variable rate mortgages. The point applies to the disposable income of not only low-income households, as suggested by the Liberal Democrat amendment, but that of all households that benefit from such mortgages. Those who were on fixed-rate mortgages and had the opportunity to reset them in the past 12 months will see some increase—although it will not be as significant, because the banks are clearly making up their margins on mortgages and are not fully passing on the base rate cut. However, I would argue that that cut has had a far more significant impact on disposable incomes and economic activity than the footling VAT cut.