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The Budget as it relates to Wales

I do not accept those claims; this Budget is progressive and fair. If the right hon. Gentleman looks at the information that we have provided—for the first time in any Budget—on the distributional impact of the measures, it clearly shows that the Budget’s costs will be most heavily felt by those with the broadest shoulders, which is absolutely right. On VAT, as I explained to the House on Monday night, the Office for Budget Responsibility showed us when we came into office that the structural deficit, which is the part of the deficit that can be repaid only by the action of Government policy, was £12 billion larger than the previous Government had suggested. We therefore had a choice about how to fill that gap. Should it be filled through yet more spending cuts or through a tax measure? We took the view that £12 billion of extra cuts on top of what we were already considering would have put essential services under threat, and a tax rise was therefore the right choice. No party went into the last election proposing to raise VAT, but no party ruled it out either. The right hon. Gentleman knows that other measures in the Budget—the increase in the income tax personal allowance, the uprating of the basic state pension in line with earnings and the substantial increase in the child tax credit—have the effect of protecting the poorest.