Alan Johnson heavily criticised the New Year rise in VAT from 17.5 per cent to 20 per cent this morning, warning it would cost jobs and could jeopardise the economic recovery.
Is this responsible opposition? A Tory source points out that Labour would have almost certainly have done the same thing – or at least considered it very strongly.
It is true that an initial plan by Alistair Darling to lift VAT was over-ruled by Gordon Brown in favour of increasing national insurance. But quotes from the election campaign make clear that the option was kept open.
* Darling was quoted saying that ruling out a VAT rise would have been ‘absolutely daft‘ (The Daily Telegraph, 13 April 2010).
* Gordon Brown refused to rule out a VAT rise during the election. ‘We’ve never actually made any promise about the VAT rate. But I can give you an absolute assurance that we have not raised VAT since 1997‘ (The Daily Telegraph, 13 April 2010).
* During the election campaign Alistair Darling said ruling out VAT rise would be ‘ludicrous’ and ‘daft’. When asked about it during the chancellors’ TV debate he said: ‘no Chancellor or would-be Chancellor is ever going to say they’re not ever going to change tax rates over the next five, ten years. That would be a ludicrous position to get in to‘ (Chancellor’s Debate, Channel 4, 29 March 2010).
Jim Pickard
Kiran Stacey