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The Budget

I would like to deal with one of the issues relating to the money that is being taken out of the Welsh economy. The Budget has been quite deceptive this year. Because the VAT rise was introduced in January, many newspapers, in reporting on the Budget and considering the effect on family income, did not factor it in. It will have a very significant effect. We welcome the raising of the personal allowance. That is sensible and progressive. However, a family who will gain perhaps £40 plus will spend some £450 during the year on increased VAT, so it will not help families as much as it might appear. It will also take money out of the local economy, which is the point that I really want to make. Let us consider fuel duty. Yes, we have seen fuel duty reduced in the same way as we cancelled or postponed fuel duty rises in the past, but the VAT remains. Therefore, as the Secretary of State for Transport himself said, families on low incomes, families who are squeezed, will be saving—stopping their spending—in other areas. Families who live in areas where they have to use a car, who have jobs that mean they have to use a car or who have to buy products whose price is increased because of the cost of fuel will reduce their spending elsewhere in the economy. Now we come to the winter fuel allowance. We were accused of scaremongering dreadfully before the last election—how dare we suggest that any incoming Conservative Government would even consider touching the winter fuel allowance? But here we are. We have it in black and white—a reduction from £250 to £200 and, for the over-80s, a reduction from £400 to £300. That is at a time of rocketing fuel prices. One thing about that benefit, of course, was—