20% VAT 'would cost jobs and cut spending'

INCREASING VAT from 17.5 to 20 per cent would cost 163,000 jobs and cut consumer spending by £3.6 billion, a business group warned today.

The British Retail Consortium warned that higher VAT would lead to less demand for goods and services and lower margins for companies, forcing them to cut costs and slash jobs.

There is increasing speculation in business circles that the coalition Government is planning a VAT rise.