Two nation Conservatism: VAT rise hits North harder than South

A new report shows the Governments rise in VAT could hit not only the poor, but also the middle class heavily, with some areas being particularly drastically hit.

The Government’s proposed rise in VAT from 17.5% to 20% in the new year will hit Scotland, Wales and the North harder than the Southeast and London according to new research by the marketing firm, Acxiom.

The report covered in today’s Daily Mail separated the impact of the VAT rise on discretionary spending into four quartiles. The two quartiles most resilient to the regressive tax rise were overwhelmingly situated in London and the South East. Among the 10 places least likely to be affected by the VAT rise are the Tory heartlands of West Berkshire, Buckinghamshire, Surrey, Hertfordshire, Wokingham, Windsor and Maidenhead, and Oxfordshire where David Cameron’s Witney seat is situated.

According to the report people living in Hull, Windsor and Maidenhead, Blaenau Gwent, Stoke-on-Trent, Leicester, Middlesbrough, Orkney, Eilean Siar, Ceredigion, Merthyr Tydfil, and Gwynedd will be worst affected.

The conclusion of the report outlines that some in the ‘squeezed middle’ will be among the worst affected by the tax change:

“The UK is likely to suffer another collective financial headache owing to the January 2011 rise in VAT. Not only will household expenditure on goods subject to the sales tax rise by more than £6 billion, consumers will also face a drop of more than £2 billion in discretionary income… 

“It is the groups that are already overstretched that will feel the biggest impact on their overall  household expenditure. What is surprising is that two groups not normally associated with being overstretched – those who are “comfortable” and those with “an acceptable standard of living” – are likely to be put under pressure by the drop in their discretionary income brought about by the rise in VAT. ‘

Among those badly hit will be those with teenage children and large families due to their higher level of discretionary spending and living costs in comparison to other households.

‘We are all in this together’? Except, once again, some are in it more than others.

23 Responses to “Two nation Conservatism: VAT rise hits North harder than South”

  1. Jordan Hall

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  2. Duncan Weldon

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  3. Francis Robson

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  4. Max

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  5. Northern TUC

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  6. John Breeze

    Two nation Conservatism: VAT rise hits North harder than South //bit.ly/giEiUN ~ConDemNation #Labour #Libdems #Tories #Politics

  7. Sky Pendle

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  8. Ell Aitch

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  9. Pat Raven

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/fNTs2Q

  10. Mike King

    VAT rise hits North harder than South //ht.ly/3kPkD

  11. “Two nation Conservatism” « sgmpolitics

    […] has been described in the past as a “one nation Conservative“. Well according to a recent study, the impact of the VAT rise shows the opposite to be the case… Leave a Comment LikeBe the […]

  12. Mr. Sensible

    This will stop people spending, which makes it another Coalition policy which could damage growth.

  13. Julian

    So, presumably, Labour’s reduction of VAT last year benefited the North more than the South. I don’t remember anyone complaining.

  14. Kevin Richards

    The North & South divide get bigger RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/fNTs2Q

  15. Charles

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/ejSy75

  16. Anon E Mouse

    Mr.Sensible – Well you’ve been consistently wrong so far about growth and double dips and the economy in general.

    You’re wrong again and this “article” is just an excuse to have a dig at the government – one which serves to remind the readers that Labour, under the leadership of the dithering Ed Miliband, really has nothing to say.

    It has no obvious merit whatsoever Mr.Sensible and my advice is to calm down, relax and ignore it as the country gets back to a semblance of normality after 13 horrible years of a Labour control freak government…

  17. Matthew Sinclair

    .@leftfootfwd report VAT hike will hit North harder //bit.ly/hTWd5U – one more policy entrenching econ. dependency

  18. Mr. Sensible

    Mr Mouse, with the OBR upgrading it’s forecasts for 2010 it’s easy to conclude that.

    However the OBR has downgraded it’s forecasts for 2011 and I think 2012, and these are of course uncertain.

    It is not true to say that I want things to go wrong; I am just pointing out the risk this government is taking.

    The British Chambers of Commerce have I believe expressed concern about this.

  19. Bradley

    Mr Sensible, are you sure that the forecast for growth is being downgraded?

    //onusprobandy.blogspot.com/2010/11/compounding-percentages.html

    It appears that when we look beyond the polemic bias, it’s actually not.

  20. Spir.Sotiropoulou

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/fNTs2Q

  21. Andy McCormick

    RT @leftfootfwd: Two nation Conservatism: VAT rise hits North harder than South //bit.ly/fNTs2Q

  22. Five facts about Osborne's permanent VAT rise | Left Foot Forward

    […] published last week by the marketing firm, Acxiom, shows that there is a north-south divide in the impact of the VAT rise. The study showed that London and the South East were more resilient to the tax rise than other […]

  23. Budget 2012: Osborne hasn’t done enough to help unemployed in the north | Left Foot Forward

    […] Two nation Conservatism: VAT rise hits North harder than South 6 Dec […]

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