Labour tax policy in chaos following publication of plans to increase VAT

Guido had the evidence: one of the budget documents talking about increasing VAT to 18.5% in 2011-12. Labour’s response? It’s a horrible editing blunder and that isn’t their plan, that bit shouldn’t have been in the paperwork, and so on.

Vince Cable has nicely summed up the situation:

This is either gross incompetence or duplicitous. It may be that this may be one option that they didn’t pursue. But if that is the case, why did it find itself in public documents?…

There are two explanations: they did pull it and maybe one of the reasons that the deficit is so alarmingly large is that they realised that this wasn’t going to be politically palatable.

Another explanation and this is more negative, is that they still have this on the stocks for after the election. This is probably their preferred option if they have to proceed with further tax rises.