Tories ‘won’t raise VAT’ despite £30bn cost-cutting

A TORY government will not increase VAT in the next parliament Prime Minister David Cameron has pledged despite the need to find £30 billion of savings in the next three years.

Prime Minister David Cameron speaks during Prime Minister's Questions in the House of Commons. Picture: PA

The promise came in exchanges in Prime Minister’s questions where Labour Ed Miliband refused to rule out a rise in National Insurance contributions after he was challenged by Mr Cameron.

With just six weeks to go to the election the question of tax and finding £30 billion of austerity measures was central in the final PMQs before Parliament is dissolved.

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However, Mr Cameron’s promise not to raise VAT was met with scepticism because he made the same pledge in 2010 before Chancellor George Osborne increased it from 17.5 per cent to 20 per cent in his first Budget.

Mr Miliband opened his attack in PMQs with a joke about how on Monday Mr Cameron had “announced his retirement plans” by telling the BBC he would not seek a third term.

The Labour leader said: “You said it was because you believed in giving straight answers to straight questions.

“After five years of Prime Minister’s Questions, that was music to my ears.

“So here’s a straight question: will you now rule out a rise in VAT?”

Mr Cameron jabbed back: “In 43 days I plan to arrange your retirement.”

The premier added: “You are right, straight answers are deserved by straight questions.

“The answer is yes.”

Facing roars from the Tory benches, Mr Miliband continued: “Nobody is going to believe it. Nobody is going to believe it because of your extreme spending plans, because your numbers don’t add up and because you promised it last time and you broke your promise.”

After being interrupted by Speaker John Bercow, the Labour leader challenged Mr Cameron to confirm spending cuts in the next three years “will be greater even than anything seen in the last five?”

Mr Cameron said: “You are wrong about that. Straight answer from me, straight question to you - I have ruled out VAT, will you rule out national insurance contributions? Yes or no?”

But refusing to answer, Mr Miliband said: “You will have plenty of time to ask questions after May 7 and I’m afraid to say your own Office for Budget Responsibility says a much sharper squeeze on real spending than anything seen over the past five years.”

Labour York Central MP Sir Hugh Bayley pointed out that Mr Cameron dismissed claims the Tories would increase VAT before the 2010 general election but still raised the tax, asking why anyone would believe him now.

But Mr Cameron insisted that because he is in Government he now knows “what needs to be done” and warned of a Labour “jobs tax bombshell”.

Sir Hugh said: “I have here a cutting from the York Press on April 24 2010 which says and I quote: ‘David Cameron last night dismissed claims that Tories would put up VAT’ after the election.

“Now that was at the last election, why should the public believe promises you make at this coming election?”

Mr Cameron replied: “I have given the straightest possible answer and this time in Government we know what needs to be done.

“We know the changes.

“And the truth is both sides of this House have voted for a £30 billion adjustment.

“The Labour frontbench voted for it too.”

After PMQs Lib Dem Scottish Secretary Alistair Carmichael also questioned whether Mr Cameron could keep his promise on VAT.

He said: “I think people are right to be sceptical given the size of the unfunded [income] tax cuts he [Cameron] has promised.”