In the run up to the 1979 election, Labour were obsessed with the Tories planning to double VAT. Howe and Thatcher dismissed it as a smear. Howe was pretty explicit: “We have absolutely no intention of doubling VAT.” The Daily Mail was so convinced, it included the “double VAT” charge in a splash on “Labour’s dirty dozen lies”, just days before the campaign concluded.
The trouble was that the Tories had already agreed a “massive” hike in VAT a good year before winning the election. Sure, they didn’t want to double the rate. The secret plan, hatched at Howe’s house on the Fentiman Road, was completely different: to raise VAT from 8 to 15 per cent. Howe announced it in his first Budget. This story by my colleague Nick Timmins (written when he was at the Independent) runs through the whole saga. Read more