VAT rise is wrong tax at wrong time, says Miliband

Ed Miliband has called today’s rise in VAT to 20% the wrong tax at the wrong time.

Ed Miliband
Ed Miliband

Speaking to Labour activists in Oldham East and Saddleworth yesterday as they prepare for next week’s by-election there, the Labour leader criticised the Liberal Democrats for supporting a policy they attacked in opposition.

Miliband said: “This is the wrong tax at the wrong time. Nick Clegg warned of a Tory VAT bombshell. He didn’t tell us that he would be standing by and applauding when George Osborne dropped that bombshell.”

The Liberal Democrats ran a poster campaign during last year’s election claiming that under a Conservative government the average family’s VAT bill would rise by £389.

Miliband added: “The squeeze designed in Downing Street will come to your street, to the high street, to every street up and down this country.”

VAT rose from 17.5% to 20% at midnight last night and last month Chancellor George Osborne announced it would be permanent.

On the BBC Today programme this morning, he refused to rule out further increases but said the government had laid out their plans to reduce the deficit. (article continues below)

The Federation of Small Businesses says 70% of small businesses expect the rise to have a negative impact on their business and have urged the government to review the increase once the deficit has been “significantly reduced” and return it to 17.5%.

Last week, Shadow Chancellor Alan Johnson called on the government to rethink the VAT rise, but Michael Fallon, the Conservative Party deputy chairman and Treasury select committee member, dismissed Johnson’s call as hypocritical opportunism.

He said: “This is exactly the kind of hypocritical opportunism the public has come to expect from Alan Johnson. The VAT rise is quite simply unavoidable after 13 years of Labour rule took us to the brink of bankruptcy.”

He added: “It is a progressive and fair way of repairing the mess that Labour left behind.”