Businesses and families have been given assurances by the three main political parties that they will not increase VAT.
Shadow Chancellor Ed Balls said on 24 March: “The next Labour government will not raise VAT”, describing it as “an unfair tax” that hit pensioners and the poorest hardest.
The following day, he announced: “We will make it clear in our manifesto that Labour will not in the next parliament be raising national insurance.”
On the same day, during Prime Minister’s Questions, David Cameron, in response to Labour leader Ed Miliband asking whether he would rule out a rise in VAT, said: “Straight answers deserve straight questions and the answer is yes”.
Earlier in the week, Chancellor George Osborne had told the Treasury Committee of MPs that the Conservatives did “not need to increase VAT” but Mr Balls said that he had failed to give “a cast iron guarantee” that the tax would not be increased.
In the same week, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that under his party’s plans, there was no need to raise income tax, national insurance, VAT or corporation tax.
The standard rate of VAT has remained at 20 per cent since January 2011. It had been reduced to 17.5 per cent in January 2010.
Link: HMRC information on VAT