Labour and Tories vow not to raise VAT if they win the election

VAT looks set to stay at 20% or less until 2022 after the Conservatives and Labour promised not to increase the tax on goods and services if they win the general election.

Theresa May followed Labour’s shadow chancellor John McDonnell in ruling out increases to VAT after the June 8 poll.

But the Prime Minister signalled she would scrap the Tories’ flagship “tax lock” pledge, which also rules out increases to income tax and national insurance.

She said it was her intention to cut taxes on “working families” while Mr McDonnell also promised to “protect middle and low earners”, although neither defined exactly who they meant.

Mrs May told ITV’s Peston on Sunday: “We have no plans to raise the level of tax. In relation to specific taxes, we won’t be increasing VAT.”

But asked if she will maintain the Tories’ 2015 tax lock, which pledges no increases to income tax and national insurance as well as VAT, she told BBC One’s Andrew Marr Show: “We have absolutely no plans to increase the level of tax but I’m also very clear that we don’t want to make specific proposals on taxes unless I’m absolutely sure that I can deliver on those.”

Mr McDonnell said Labour is committed to a “fair taxation system” and suggested “giveaways” to corporations and the rich would be reversed if Jeremy Corbyn is PM, to pay for pledges to spend on the NHS and schools.

He told Peston: “Look, there’s going to be a barrage of attacks (over spending and tax increases), but the issue around fair taxation is that we will protect middle and low earners.

“I will say also, we will not increase VAT and I want you to ask Theresa May that question as well because if you remember last time the Tories promised no increase in VAT and then they increased it afterwards and then that falls on, that’s a regressive tax, that falls on some of the poorest and middle earners as well, so that’s one guarantee we’re giving.”