TORIES’ VAT BOMBSHELL
Chancellor suggests he will drop 2015 pledge not to hike taxes
THE Tories yesterday signalled they could raise VAT and other taxes if they win the election.
Chancellor Philip Hammond hinted at reversing his party’s 2015 manifesto pledge not to hike VAT, income tax or national insurance contributions.
Labour’s John McDonnell said: “This is quite a tax bombshell.”
STRUGGLING families can expect a tax bombshell should the Tories stay in power after the election.
Chancellor Philip Hammond signalled he would drop the party’s 2015 manifesto pledge not to raise VAT, income tax or national insurance contributions.
Speaking yesterday, Mr Hammond said: “I’m a Conservative. I didn’t come into politics because I believe in higher taxes. I’m not in the business of having an ideological desire to raise taxes.
“But we need to manage the economy sensibly and sustainably. We need to get the fiscal accounts back into shape.
“It was self-evidently clear that the commitments that were made in the 2015 manifesto did and do today constrain the ability to manage the economy flexibly.”
His remarks come just weeks after he tried to hike NICs by £240 a year for millions of self-employed people in his first Budget as Chancellor.
U-TURN
It was seen as an attack on “white van man” and he was forced into a humiliating U-turn after it was pointed out the move would break the manifesto pledge.
Last night Shadow Chancellor John McDonnell tore into his Tory counterpart. He said: “He’s got problems with the economy, he’s got problems with the budgeting he has done.
“As a result of that there will be tax rises under a Conservative Government if they get elected. “This is quite a tax bombshell.” Lib Dem MP Alistair Carmichael added: “This is May and Hammond admitting that the cupboard is bare thanks to their disastrous hard Brexit.
“The Conservatives are causing so much carnage to the economy they have had to admit the country is broke before election day.” No10 tried desperately to play down Mr Hammond’s comments, insisting “no decision has been taken” about the manifesto pledge.
But Mr Hammond knows he must find new ways to close the budget deficit after seven years of Tory austerity failed to balance the books.
Britain still borrows more than £50billion a year and the Chancellor has been unable to say how he will close the gap. Tory chancellors have a history of hiking VAT to plug holes in their Budgets, from Geoffrey Howe and Norman Lamont to George Osborne, who raised it to the current record 20% in 2010. Mr Osborne plotted to bring in extra cash with a further rise to 22.5% in 2015, before relenting amid fears it would cost the Tories the election.
A similar move by Mr Hammond would raise well over £10billion.
However, because it is paid at the same flat rate by everyone, the poorest families would be the hardest hit.
Labour election chairman Andrew
Gwynne MP said last night: “Same old Tories. When it comes to making choices, it is always those on lower and middle incomes that are in the firing line.”
Pensioners can also expect to be hit in the pocket after Theresa May yesterday failed to re-commit the Tories to the pensions “triple lock”. Instead she urged the retired to “look at what the Conservatives in government have done” without confirming it will keep raising pensions each year by either prices, earnings or 2.5% – whichever is highest.
Mr McDonnell said: “It’s now clear pensions protections are now in jeopardy.”
Meanwhile, the Prime Minister’s election plans were plunged into chaos as yet another of her top spin doctors walked out yesterday. No10 press secretary Lizzie Louden told pals she will “move on to other things”.
She was Mrs May’s most senior political spinner after the resignation of communications director Katie Perrior earlier this week.
And it follows the departure of both Mrs May’s official spokeswoman Helen Bower and deputy spokesman Greg Swift earlier this year.
Lib Dem chief Tim Farron said: “No10 is in crisis as all their top spin doctors jump ship.
“Even they can’t defend Theresa May’s divisive hard Brexit plans.”
There are reports of a grim atmosphere at No10 under Mrs May and her chiefs of staff Nick Timothy and Fiona Hill.
One source said the mood has turned “from day to night”.
RAISING taxes and cutting pensions is a double dose of Tory austerity that would leave tens of millions worse off.
The PM and her Chancellor have made a stumbling start to their election campaign by appearing to be make up policy on the hoof.
Theresa May’s evasiveness on state pension increases and Philip Hammond demanding freedom to raise income tax, VAT and national insurance means: Vote Tory for a tax rise.
Labour, remember, promises to keep the system for updating state pensions.
As for Tory claims to care about working people, Hammond’s sly bid to break a manifesto promise and put up NI show they are worthless words.
What makes it even more galling is at the same time the Tories are reducing inheritance tax for the very wealthiest.
May sneakily called the general election early for one reason only. Naked political gain.
The price of another Conservative victory would be paid by workers and pensioners. These early stumbles suggest the PM may not have this campaign all her own way.