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.

Getty
Show Hide image

One Day Without Us reveals the spectre of Britain without immigration

Imagine a country without its NHS workers, its artists and even its consumers. That's why immigrants are striking today. 

What’s the best way of making yourself heard in politics? Protesting in the street, or contacting the media? Writing to politicians? A badge?

One option, of course, is to walk out - and give people a chance to recognise what they’d be missing if you weren’t there. In the labour movement, that’s long been an option – a last-case option, but an option nevertheless – when your contribution isn't being recognised.

A strike is a tit-for-tat negotiation and a warning shot. “I’ll work properly when you employ me properly”, it says, but simultaneously: “Here’s what you’d lose if I stopped”. Done right, the worker’s absence can shift the power balance in their favour.

Normally, people strike according to their role, in pursuit of certain conditions – the tube strikes, or last year’s teacher's strike.

Yet there is also a long and rich history of walk-outs whose terms are broader and boundaries hazier. One of the most famous is surely the 1975 Women's Strike, in Iceland, during which 90 per cent of the country's women refused to participate in either paid or unpaid work.

In 2016, the formula was repeated in Poland, where women went on strike to protest against a draconian change being proposed to the country's already-strict abortion laws. (It worked.)

Immigrant strikes, too, have a history. In 2006, for instance, a coalition of Los Angeles Catholic groups, unions and immigration reform groups proposed a boycott in opposition to a bill which, among other things, called for new border security fences to be built between America and Mexico. (Ahem.)

The action grew to become a national event, and on May 1, the “Great American Boycott” took place, with immigrants from Latin America and elsewhere leaving work, skipping school and refusing to buy or sell goods.

Now, with Donald Trump in the White House and Brexit looming, some have decided it’s time for another strike. Enter “One Day Without Us”.

Today, immigrants here in Britain will strike not for pay conditions or holiday allowances, but for basic recognition and respect. Across the country, businesses will close and immigrants will leave work, many of them to take place in alternative actions like rallies or letter-writing campaigns.

The name of the protest pulls no punches. This, it says, is what it would be like if we all went away. (Subtext: “like some of you want”.)

Because – and let’s be honest here – it’d be bad. In hospital this summer, I was treated by migrants. After 24 hours in NHS, I took a count, and found that only about one in five of the staff who had treated me were identifiably English. Around 4.6 per cent of NHS staff nationally are from the EU, including 9 per cent of doctors. Immigrants clean buildings, make our food, and provide a whole host of other vital services.

One Day Without Us, then, could do Britain a huge favour - it provides us with a quick preview function before anyone ups and leaves for good, taking the heart of our health service, or our food supplies, with them.

In recognition of this, some businesses are actively giving their workers the day off. One 36-year-old owner of a support services company, for instance, is giving her staff a paid holiday.

“Not all my colleagues are taking up the offer not to come in”, she explained. “Some, both British and foreign-born, would prefer to work. That’s fine, I wanted to give colleagues the freedom to choose.

 “It will cause some inconvenience and I’ve had to explain to clients why we aren’t offering all our services for one day, but I feel doing this is the only way to show how much this country relies on migrants. I may be a businesswoman, but I’m a human being first, and it hurts my heart to see how foreign-born colleagues are being treated by some people in the current political climate."

The woman, whose staff is 65 per cent foreign born, has asked her company not to be identified. She’s heard her staff being abused for speaking Polish.

Of course, not everyone is able to walk out of work. I write this from Chicago, Illinois, where last week activists participated in an American predecessor to One Day Without Us called “Day Without Immigrants”. Type “Day Without Immigrants" into Google followed by the word "Chicago" and you will find reports of restaurants closing down and citizens marching together through the city.

But search for just "Day Without Immigrants", and the top stories are all about participants being fired.

One Day Without Us, then, encourages any form of engagement. From human chains to sessions during which participants can write to their MP, these events allow immigrants, and supporters, to make themselves known across the country.

Businesses and museums, too, are involved. The Tate, for instance, is offering free tours showing visitors artworks created or influenced by migrants, showing Londoners which of the paintings that they’ve seen a dozen times only exist because of immigration.

Because paintings, like people, come from everywhere, whether or not you remember. Britain is a mongrel country, and so its art and culture are as mongrel as its workforce: a persistent thread through the country’s history.

We risk a lot forgetting this. At its best, assimilation provides a way of integrating without forgetting one’s own unique identity. In a world where immigrants risk threats or violence, however, invisibility can be the best option. For some, it is better not to be recognized as an immigrant than be abused as one.

Those of us who don’t risk threats have a duty to recognise this. I dislike the glibness of “we are all migrants” – maybe, technically, but we’re not all getting slurs shouted at us in the high street, are we? Still, I also don’t like anyone forgetting the fact that their existence, in all probably, is contingent on someone once being given clemency in a place that was their own. The movement of people is woven into the fabric of society.

Of course, it is impossible to say how successful One Day Without Us will be, or how many people’s lives will be directly affected. But I hope that, even as a gesture, it works: that people think of what would be missing from their lives without immigration.

We ignore it at our peril.

You can view all the One Day Without Us events on the organisers’ website, or contribute to a fund to support businesses which are closing for the day here.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland