George Osborne chose to raise VAT, one of the most regressive taxes of all, in yesterday’s Budget, but there was a time when his party campaigned fiercely against a rise.
As recently as November 2008, the Tory party issued this poster attacking Gordon Brown’s alleged plan to raise VAT to 20 per cent. But in yesterday’s emergency Budget, Osborne did just that.
No doubt Osborne would reply, as he already has done, that Brown’s economic legacy made a rise in VAT “unavoidable”. But this claim doesn’t bear scrutiny. The additional £32bn cut in current spending announced by the Chancellor is more than enough to eliminate “the bulk” of the deficit. The reality is, as Will Straw noted yesterday, that the rise in VAT was only necessary to pay for a range of dubious tax cuts elsewhere.
Osborne’s tax cuts, including large cuts to corporation and income tax, totalled £12.4bn, while the VAT hike is expected to raise £13.5bn.
There was nothing inevitable or unavoidable about this tax rise. Rather, it reflected the Tories’ ideological preference for VAT, a flat tax that takes no account of personal income.
Incidentally, the fallen idol Vince Cable was finally questioned on the Lib Dems’ own “VAT bombshell” poster last night.
He said: “It may not have been the best-designed advertisement campaign that’s ever been considered,” but then added that he had always been clear that no party “could rule out” such a tax rise.
In the age of the “new politics” I suppose we’re not meant to draw attention to the parties’ past opportunism. After Osborne’s disastrous austerity Budget, however, it becomes not just a duty, but a pleasure to do so.
Hat-tip: Liberal Conspiracy.