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(Clauses 1, 4, 8, 189 and 209, Schedules 1, 23 and 33, and new Clauses and new Schedules relating to value added tax)

The hon. Lady is absolutely right: that is another of the behavioural consequences, the full implications of which are not yet apparent. One has to ask why we are going down this road. The justification for it—the avowed policy objective—is this:"““In order to address the fiscal deficit, the Government believes that it is right to ask those on higher incomes to contribute more.””" The Government's proposal, however, asks those on higher incomes with families and children to contribute more, while those on higher incomes without children are not asked to contribute more. I do not see how that can be fair. In case anyone thinks this is an issue discussed only among academics, let me say that it certainly goes very close to the heart of many of my constituents. I shall quote briefly from a letter that I received since the Budget from a constituent living in Christchurch. He starts off:"““I am writing to express my utter disgust and outrage at your party's stance on child allowance announced in the budget last week.””" He explains that he and his wife choose to work hard, believing that they have a responsibility"““to look after ourselves and to help to generate wealth for the wider community””" by contributing their utmost to industry. He says that he has an income of £60,000 and that his wife earns £12,000, providing a combined income of £72,000. As he puts it:"““under your disgusting new Tax rules we will lose the child benefit for our two children. However, in a household with two working parents earning £40,000 each, combined income of significantly more…that family gets to keep their benefit.””"