Labour’s Balls in pledge on VAT


Published: Tuesday 24th March 2015 by The News Editor

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Labour would not raise the rate of VAT if it is returned to government, Ed Balls will declare as parties continued to battle over post-election tax and spending plans.

The shadow chancellor said he could rule out any hike in the purchase tax – a move the Opposition claims the Tories plan to pay for £7 billion of promised income tax cuts.

But the Conservatives claimed the pledge left Labour with no option but to impose a “jobs tax” of higher national insurance or income tax to meet its commitment to eliminating the deficit.

Mr Balls will use a speech in Birmingham to renew warnings of a repeat of Chancellor George Osborne’s increase in VAT – from 17.5% to 20% – immediately after the 2010 general election.

That had cost families an average of £1,800, he will say, and was evidence of the higher priority given by the Tories to the better off.

“We will make our tax commitments in full in our manifesto. But I am clear that while millionaires have been given a huge tax cut, working people are paying more in tax after the last five years of the Tories,” he will say.

“So today I can announce a clear pledge to the British people. The next Labour government will not raise VAT . And we will not extend it to food, children’s clothes, books, newspapers and public transport fares.

“We will not raise VAT because it’s the tax that hits everyone. It’s the tax that hits you every day. And it hits pensioners and the poorest hardest.”

It was put up in 2010 ” despite David Cameron telling the British people a few days before the election that he had ‘no plans’ to do so and despite the promises of Nick Clegg”, he will say – and had been raised by every Conservative administration for 40 years.

“Labour can make this manifesto commitment for the next Parliament because, unlike the Tories, all of our promises are fully funded and paid for,” he will insist – pointing to already-announced plans such as a mansion tax and restoring the 50p top rate of income tax.

A Conservative spokesman said: ” Labour have let the cat out of the bag. Ed Balls is confirming his real plan: big hikes in the jobs tax or tax on hard work.

“Labour have already announced a raft of tax rises, but all but one of these would fund their spending pledges.

“Ed Miliband and Ed Balls have repeatedly said they will raise taxes. It is time that they came clean with the British public about which taxes they will raise – income tax or national insurance?

“The choice at this election is becoming clearer by the day: sticking with the competence of the Conservatives’ long-term economic plan that’s securing a better future for Britain or abandoning that plan with hardworking taxpayers paying the price for the economic chaos that would result from Ed Miliband in Downing Street.”

Mr Osborne has insisted that he had no plans to repeat the VAT hike.

“I couldn’t have been clearer that our plans do not involve tax increases, including VAT, because our plans involve cutting public expenditure and saving on welfare budgets,” he said in response to previous Labour attacks.

Published: Tuesday 24th March 2015 by The News Editor

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