Conservative Diary

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Tories deny plans for 20% VAT

Sunday 10am update: PoliticsHome records Andrew Lansley's denial of there being a plan for 20% VAT on the Andrew Marr Show

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John Major recently raised the prospect of 20% VAT if serious spending cuts were not delivered and tomorrow's Sunday Telegraph is splashing a suggestion that the Conservatives are considering such an increase:

"The proposal – likely to raise up to £10 billion a year – is being “very actively considered” at the highest level, according to senior shadow ministerial sources. It could be introduced within weeks of a Tory victory at the next election, which must be held by June, in a package that is also likely to include severe cuts to public spending. David Cameron, the Tory leader, and George Osborne, the shadow chancellor, are understood to have reluctantly concluded that the state of the public finances they are likely to inherit will mean that simply cutting spending by tens of billions of pounds will not be enough."

A Tory spokesman tried to pour cold water on the story telling the newspaper: “There are no plans for a VAT increase and there have been no discussions about it.”

The party's commitments to maintain spending on health, in particular, as well as international development and the EU mean that some sort of tax increases do seem very likely from the Conservatives. Ken Clarke prepared the ground recently.

Last November the Tories launched a campaign alleging that Labour was planning a 20% rate for VAT: 

291108image1Tim Montgomerie

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