How the Tories and the Lib Dems broke their VAT promises

David Cameron insisted that the Tories had “absolutely no plans” to raise VAT.

As VAT rises to a record high of 20 per cent, I thought it might be worth looking back at the promises the Lib Dems and the Tories made on the subject during the election.

The Lib Dems famously made their opposition to a VAT increase a centrepiece of their general election campaign, warning of a "Tory VAT bombshell". They were right about that but, presumably, never planned to help drop it.

At that time, Nick Clegg said: "We see absolutely no reason to raise VAT because we have done our homework, we have identified where money can be generated and where money can be saved."

VAT

The Conservatives

The Tories' VAT promises have received less scrutiny but, if anything, their disingenuity is worse. Throughout the election campaign, David Cameron repeatedly stated that his party had "absolutely no plans to raise VAT".

He said:

We have absolutely no plans to raise VAT. Our first Budget is all about recognising we need to get spending under control rather than putting up tax.

This falls some way short of a guarantee not to raise VAT, but it also gives no hint of a tax rise that Cameron was planning all along. The grim conclusion is that the Tories hid this tax increase from the voters for electoral purposes.

More strikingly, in May 2009, the Conservative leader suggested that he would never raise a tax that "hits the poorest the hardest". As he said:

You could try, as you say, to put it on VAT, sales tax, but again 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. Any sales tax, anything that goes on purchases that you make in shops tends to . . . if you look at it, where VAT goes now it doesn't go on food, obviously, but it goes very, very widely and VAT is a more regressive tax than income tax or council tax.

Both parties have since attempted to justify the VAT rise by arguing that "things were even worse than we thought". But this claim does not bear scrutiny. The Lib Dems and the Tories were fully aware of the size of the Budget deficit and, just ten days after the coalition was formed, the deficit was revised downwards from £163.4bn to £156bn, having previously stood at £178bn. The VAT rise was a political choice, not an economic necessity.

Moreover, £12.4bn of the £13.5bn raised by the increase is being used to pay for tax cuts elsewhere, including to National Insurance and to corporation tax. In the Guardian, Philippe Legrain sets out a range of alternatives to raising VAT, including new taxes on financial transactions, carbon and land.

We are still waiting for a convincing justification for a tax rise that is not only unfair, but also economically reckless.

George Eaton is political editor of the New Statesman.

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Hillary Clinton can take down the Donald Trump bogeyman - but she's up against the real thing

Donald Trump still has time to transform. 

Eight years later than hoped, Hillary Clinton finally ascended to the stage at the Democratic National Convention and accepted the nomination for President. 

Like her cheerleaders, the Obamas, she was strongest when addressing the invisible bogeyman - her rival for President, Donald Trump. 

Clinton looked the commander in chief when she dissed The Donald's claims to expertise on terrorism. 

Now Donald Trump says, and this is a quote, "I know more about ISIS than the generals do"

No, Donald, you don't.

He thinks that he knows more than our military because he claimed our armed forces are "a disaster."

Well, I've had the privilege to work closely with our troops and our veterans for many years.

Trump boasted that he alone could fix America. "Isn't he forgetting?" she asked:

Troops on the front lines. Police officers and fire fighters who run toward danger. Doctors and nurses who care for us. Teachers who change lives. Entrepreneurs who see possibilities in every problem.

Clinton's message was clear: I'm a team player. She praised supporters of her former rival for the nomination, Bernie Sanders, and concluded her takedown of Trump's ability as a fixer by declaring: "Americans don't say: 'I alone can fix it.' We say: 'We'll fix it together.'"

Being the opposite of Trump suits Clinton. As she acknowledged in her speech, she is not a natural public performer. But her cool, policy-packed speech served as a rebuke to Trump. She is most convincing when serious, and luckily that sets her apart from her rival. 

The Trump in the room with her at the convention was a boorish caricature, a man who describes women as pigs. "There is no other Donald Trump," she said. "This is it."

Clinton and her supporters are right to focus on personality. When it comes to the nuclear button, most fair-minded people on both left and right would prefer to give the decision to a rational, experienced character over one who enjoys a good explosion. 

But the fact is, outside of the convention arena, Trump still controls the narrative on Trump.

Trump has previously stated clearly his aim to "pivot" to the centre. He has declared that he can change "to anything I want to change to".  In his own speech, Trump forewent his usual diatribe for statistics about African-American children in poverty. He talked about embracing "crying mothers", "laid-off factory workers" and making sure "all of our kids are treated equally". His wife Melania opted for a speech so mainstream it was said to be borrowed from Michelle Obama. 

His personal attacks have also narrowed. Where once his Twitter feed was spattered with references to "lying Ted Cruz" and "little Marco Rubio", now the bile is focused on one person: "crooked Hillary Clinton". Just as Clinton defines herself against a caricature of him, so Trump is defining himself against one of her. 

Trump may not be able to maintain a more moderate image - at a press conference after his speech, he lashed out at his former rival, Ted Cruz. But if he can tone down his rhetoric until November, he will no longer be the bogeyman Clinton can shine so brilliantly against.