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Labour is secretly planning to hike the main rate of VAT to fill spending black hole, says Jeremy Hunt
But Labour say claims are "absolute nonsense" in sound money war
LABOUR are secretly planning to hike the main rate of VAT if they win the election to fill their spending black hole, Jeremy Hunt insists.
The Chancellor says his opponents haven’t ruled out hiking the 20 per cent levy to help pay for pledges he claims are worth £38.5 billion in the next five years.
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The Tories say now is the time for their opponents to “be honest” having refused to rule out raising the levy six times this week.
He says Labour have said income tax and national insurance won’t be raised but stop short of making the same commitment on VAT.
But the Tories last night pointed to HMRC figures that say raising the main rate by one per cent would bring in £9 billion nearly covering the annual bill for unfunded commitments.
Mr Hunt said: “Two weeks ago, I set out official Treasury and independent costings showing Labour will have to raise taxes by £2,094 for every working family to make their sums add up.
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“Now we know how: raising VAT, a tax that will put up prices. That will hammer families’ finances and push inflation back up just when we’ve got it back to normal.
“Instead of refusing to say what he will do, Keir Starmer needs to be honest with the British people that he is going to raise VAT to fill Labour’s spending black hole.”
Shadow Chancellor Rachel Reeves hit back: "This is absolute nonsense. Labour will not be increasing income tax, national insurance or VAT. I want taxes on working people to be lower not higher. That is why we opposed the increases to national insurance when Rishi Sunak put those forward as chancellor.
"Jeremy Hunt needs to explain how he is going to fund his £71 billion unfunded spending plans that risk putting up interest rates and people’s mortgages."
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And Labour’s Darren Jones said: “None of our policies requires any further funding and that’s why there is a commitment to not raising taxes in the manifesto in this election.”
He made the comments as he accused the Tories at an emergency press conference of committing to £71 billion of unfunded spending commitments.
Mr Jones said Tory plans could see a hike in interest rates that could see £350 added to the cost of the average mortgage.
Their calculations included the long-term ambition of the Tories to abolish national insurance they say will cost £46 billion.
Mr Jones said: “If the Conservatives carry on down this path, with unsustainable, unfunded promises, it could cause a loss in market confidence once again, leading to increases in interest rates.
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