CAMERON’S TAXES PLEDGE
I’ll outlaw any rise in VAT, income tax and national insurance for five years
DAVID Cameron will today pledge to change the law to prevent increases in VAT, income tax or National Insurance over the next five years.
Putting tax at the heart of the Conservative pitch for victory in next week’s General Election, the Prime Minister will say voters face their biggest choice on the economy ‘for a generation’.
He will use a major speech to unveil a commitment to change the law within 100 days of being re-elected to introduce a ‘five-year tax lock’.
It would make it impossible for a Conservative government to increase income tax rates, hike VAT or increase its scope or raise the rate or the upper threshold for National Insurance.
The ‘read my lips’ announcement – the biggest so far in the party’s campaign – is designed to increase pressure on Labour over tax.
Independent economists said last week that tax would be £12billion a year higher if Ed Miliband wins power while Shadow Chancellor Ed Balls has failed to rule out freezing or lowering income-tax thresholds, raising the ceiling for National Insurance, hiking capital-gains tax or taxes on businesses.
Mr Cameron, addressing a rally in the West Midlands, will say: ‘This is the clearest choice on the economy for a generation. And beyond the plain facts, it also comes down to gut instinct. When you’re standing in the polling booth, ask yourself: on the things that matter in your life, who do you really trust?
‘When it comes to your tax bill, do you trust the people who taxed you to the hilt when they were in power and still haven’t come clean about the taxes they want to increase next time round? Or do you trust the Conservatives, who have cut income taxes for 26million people, and who will cut your taxes again next time?
‘We know it’s your money, not Government money. You’ve worked for it, you’ve earned it, you should be able to keep it.
Other commitments that the Prime Minister will underline include a change in the law to ensure nobody working 30 hours on minimum wage will pay income tax. The tax-free personal allowance will rise to £12,500 by 2020, he will say, while the 40p tax threshold will increase to £50,000.
Following Chancellor George Osborne’s vow to take action in every Budget to increase the 40p rate, Mr Cameron will say it will always rise ‘at least in line with inflation’. He will also restate the Tories’ vow to take the family home out of inheritance tax by lifting the threshold for married couples to £1million.
The ‘tax lock’ would apply from May 2015 to May 2020.
If a Tory government wanted to raise any of the main taxes in a fiscal emergency, it would face the humiliation of having to come back to Parliament and attempt to
‘We know it’s your money’
change the law. The Prime Minister will also amplify warnings over the potential economic chaos of a Leftwing Labour government propped up by the SNP, which is proposing a £ 180billion debt- fuelled public spending spree.
Labour has pledged not to raise National Insurance or the basic and higher rates of income tax, but left the door open to big tax rises as it will not make any commitment on thresholds or ceilings, meaning more people would be pulled into paying them if Mr Balls changes the point at which they come in. Mr Miliband will today commit the Labour to rais- ing tax credits at least in line with inflation.
‘No government led by me as Prime Minister will cut the tax credits working people rely on, while giving tax breaks to the richest. Instead, a Labour government will raise them at least in line with inflation in every Budget,’ the Labour leader will say.