Pre-Budget Report

I am now beginning to understand why Conservative Members are so scared of the issue, but it has to be faced, both in terms of contributions and entitlements; otherwise, it is fundamentally unsustainable. It is no good Members bouncing up and down here in the Chamber to talk about the long-term pension liabilities of the public sector unless they are willing to address the issue. Let me move on in my discussion of what the fiscal stimulus actually means. One of the key elements of stimulus is public investment and the other is taxation. The Government have announced this VAT cut. The Liberal Democrats have made it clear that we regard this as not the best way of cutting taxation. There is an interesting little note in the impact assessment suggesting that business will have to pay £50 million to adjust to the change in prices, and then have to pay another £50 million when they change back again in 18 months.