Today, VAT rises from 17½% to 20%. Nick Clegg warned of a “Tory VAT Bombshell” back in April but then made it happen anyway. In the same month, David Cameron denied it, telling Jeremy Paxman “we have absolutely no plans to raise VAT.” As he’d said of VAT rises a year earlier: “it’s very regressive, it hits the poorest the hardest. It does, I absolutely promise you“. So much for his promises. Last week, Alan Johnson called for a last minute rethink of the rise, finally picking up on the theme rammed home by Ed Balls months ago, just as the CBI warned of “a dramatic slowdown in the pace of economic recovery.” But Cameron and Clegg are not for turning.
Addition: David Cameron also said in one of the Cameron Direct events in 2009 (8 May in Exeter):
If you look at the effect of sales tax, it’s very regressive, it hits the poorest the hardest. It does. I absolutely promise you..it goes very very widely. VAT is a more regressive tax than income tax or council tax.”
