After banjaxing Ed Miliband at PMQs with his surprise pledge to rule out a VAT rise, David Cameron swiftly played another card, challenging the Labour leader to rule out an increase in National Insurance. His failure to do so helped give Cameron his clearest victory for months.
But just as the Tory attack was gaining momentum, Ed Balls has moved to close it down. At a briefing with regional reporters following PMQs, he announced: “We will make it clear in the manifesto Labour will not be raising National Insurance. That will be a clear pledge from us.” He later added in a BBC interview: “The right time to make the detail of pledges is in the manifesto. I made a speech yesterday in which I said we’d pledge not to raise VAT, I also said on the basic and higher rates we’d repeat our pledges from the past.
“On National Insurance, I said yesterday the Tories always make this charge but we’ve got a clear, costed plan to invest in our National Health Service which is paid for by a mansion tax and a levy on tobacco companies. Every promise we’ve made is costed and paid for, we’ve got a balanced plan on the deficit, which does not require us to have tax rises on working people who are already paying more tax under the Tories, so our manifesto will make clear the next Labour government will not raise National Insurance, there will be a clear commitment from us on VAT, on the basic and higher rates of income tax and on National Insurance: working people have suffered enough under the Tories.”
Asked whether the pledge not to raise NI was planned before PMQs, Balls said: “I made it clear yesterday in my speech, and in the Q&A afterwards, that it was not our policy to raise National Insurance and our plans do not require it because we can have a sensible approach: spending cuts in unprotected areas, some tax rises for those on high incomes and a plan to raise the minimum wage and boost wages which means we can balance the books and invest in the NHS without a rise in National Insurance or tax on working people – it’s a promise we can make because our sums add up”.
The Tories and the Lib Dems will respond in the same way that Labour did to Cameron’s VAT pledge: by insisting the promise cannot be trusted. Given the public’s understandable scepticism of such commitments it is doubtful whether either side will gain.
It is the Treasury that will be most troubled by today’s pledges. The Tories’ promise not to increase VAT and Labour’s promise not to raise NI or the basic and higher rates of income tax leaves them with fewer options to reduce the £90bn deficit that all parties have vowed to tackle after the election.