Labour could increase VAT further

Date: 7th January 2010

Chancellor of the exchequer Alistair Darling was unable to promise that the Labour party would not increase the rate of VAT to beyond 17.5 per cent in documents published yesterday (January 6th).

The rate at which VAT is charged returned to 17.5 per cent earlier this month after the party temporarily reduced it to 15 per cent in a bid to boost consumer spending during the credit crunch.

Mr Darling was unable to commit to saying VAT would not rise to 20 per cent so soon after the initial increase on January 1st.

The document, dubbed the "dodgy dossier" by the Conservatives, also indicated that the 50p tax rise, which is to be introduced in April, would be kept for the whole of the next parliament.

Mr Darling refused to repeat previous assertions that the tax rise would be temporary.

"It is necessary to raise this money over a four-year period. No chancellor would want to put a time limit on any taxes," he said.

The dossier also accused the Conservative party of having a £34 billion gap in its spending plans.