---

Finance Bill

That will be a double whammy for those new families. Something like 30,000 children in the north-east will also lose out through the abolition of the child trust fund. Their families will then be hit by the VAT increase, on top of the huge expense of a new child, which will have a disproportionate effect, as my right hon. Friend points out. It will have an even greater effect on low-income families and people who are on benefits. We spoke earlier about where the burden of the cuts will fall. It was obviously a first outing for the hon. Member for Solihull (Lorely Burt), and the Government have obviously run out of people to put on the Front Bench, judging by the performance that we saw. She tried to argue that VAT was not a regressive tax, although the Liberal Democrats said throughout the election campaign that it was. She also tried to argue that the increase would not affect the poorest in society. One of the great things about being a Member of Parliament is that we have access to a great Library here. I suggest that all hon. Members go and take a look at the excellent document on VAT and the new standard rate of 20%. Turn to page 4, which has a very useful graph that shows that, as a result of this increase, the poorest will pay some 19% more as a proportion of their net household income, while the richest will pay less than 11%. People in North Durham who are on benefits and those made unemployed over the last few weeks will find themselves being hit straight away next year by this tax. Also affected will be a lot of small businesses, shops and others.