The next Labour government will not raise VAT, Ed Balls announced today.
In his speech, Ed Balls will say:
“VAT is the tax that hits everyone – with the same rate paid by the pensioner as the millionaire.
“It’s the tax that hits you every day – whether you’re stopping at a café for a cup of tea or filling up the family car. It’s the tax that you pay from the first pound that you spend.
“And it’s the tax that hits pensioners and the poorest hardest. For many pensioners and those on the lowest incomes, it’s the biggest tax they pay.
“But the Tories and Lib Dems raised it within weeks of the last general election – 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.
“That Tory VAT rise hit the living standards of millions of people. It led to higher prices for everyone – helping inflation hit 5.2 per cent when it was raised. And over the last four years it has cost families an average of £1800, according to the Treasury’s own figures.
“Since 2010, David Cameron and George Osborne have shown their true instincts and values through the choices they have made.
“And their choice was to raise VAT on pensioners and working families, while giving the top one per cent of earners a £3 billion a year top rate tax cut.”
Ed Balls will say:
“VAT is the tax that every Tory government in the last forty years has raised. But no Labour government has ever hiked up the main rate of VAT.
“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.
“So today I can announce a clear pledge to the British people. The next Labour government will not raise VAT.
“We will not put up 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.
“And Labour can make this manifesto commitment for the next Parliament because, unlike the Tories, all of our promises are fully funded and paid for.
“Where we need to raise extra revenue for Labour’s better plan we have been clear where it will come from – however controversial.
“A mansion tax on properties over £2 million, a levy on the tobacco companies and closing tax loopholes to save and transform our NHS with an extra 20,000 nurses, 8,000 more GPs are cancer tests guaranteed in a week.
“Reversing this government’s top rate tax cut for people earning over £150,000 to help get the deficit down in a fairer way, as we balance the books in the next Parliament.
“A one-off tax on bank bonuses to fund a paid starter job for every young person out of work for 12 months or more – which they will have to take up
“Scrapping the unfair married couples allowance, which will only help one in three married couples, and using the money to instead introduce a lower 10p starting rate of tax – which will help millions more married couples, more families and more working people.
“Not going ahead with a further cut in corporation tax for large companies, but cutting and then freezing business rates for small firms instead
“Reducing the amount of pension tax relief given to the highest earners to pay for a cut in tuition fees to £6,000 – cutting not only the burden of debt on graduates, but reducing the national debt too
“Closing tax loopholes and scrapping the shares for rights scheme so we can scrap the unfair and hated Bedroom Tax
“And a higher bank levy to pay for expanding free childcare for working parents of three and four year olds – from 15 to 25 hours a week – to help make work pay and help parents balance work and family life.”