UK Politics

Was Cameron VAT pledge an elephant trap for Labour?

David Cameron and George Osborne Image copyright PA
Image caption The prime minister was far more emphatic on the issue than his chancellor has been

The campaign has not even got under way, yet in the space of a couple of hours we have now been treated to not only one election pledge, but to two.

The prime minister ruled out raising VAT if re-elected - while Labour said National Insurance contributions wouldn't go up.

Usually politicians fudge the question of tax rises.

When he was leader of the opposition David Cameron himself said "we have no need to raise taxes" - before hiking up VAT after polling day.

Famously, John Major said he had "no plans" to put up the sales tax - before his chancellor did just that.

And when he appeared in front of the cross-party Treasury committee of MPs on Tuesday, the current chancellor seemed to be continuing that tradition.

Under repeated questioning, George Osborne said: "The policies we have do not involve a VAT rise."

That formulation appeared to give him not so much wriggle room, but an entire wriggle mansion.

Labour assumed their campaign warning of further VAT rises to come under the Tories was very much on the money.


But George Osborne's allies are suggesting privately that he had, in fact, been walking Ed Miliband to the edge of an elephant trap, then beckoning the prime minister to push the opposition leader in.

Ed Miliband's strategists fully expected Mr Cameron to repeat the chancellor's obfuscation on tax at the final Prime Minister's Questions of this Parliament.

Image copyright PA
Image caption Labour has seen VAT as potent line of attack against the Conservatives

They would then have expanded on the theme, inviting the prime minister to answer other difficult questions - then say he wasn't being straight with the British people for avoiding them.

But the Labour leader was completely wrong-footed when first the prime minister said he would rule out a VAT rise and then counter-punched, inquiring if Labour would now rule out an increase in National Insurance contributions.

Ed Miliband dodged the question and what could have been downbeat Conservative benches, uneasy over the prime minister's announcement this week of his retirement plans, were given something to cheer.

The reason Ed Miliband didn't respond is because he was holding the National Insurance pledge back for Labour's manifesto.

Brave face

But that soon became unsustainable - so the other Ed, the shadow chancellor Ed Balls, had to undertake a hasty round of the TV studios to do just that.

When I spoke to him mid-tour, he put on a brave face.

His view was that George Osborne, having raised VAT from 17.5% to 20%, wanted to give the issue a low profile - whereas the prime minister had now made the mistake of putting it centre stage.

And he believed David Cameron's promise would be judged against his past VAT-raising performance.

He defended Ed Miliband's reluctance to talk about National Insurance as he felt it would have been "inappropriate" to announce Labour tax policy at PMQs.

So the prime minister - always a better tactician than strategist - can at least satisfy himself that he smoked Labour out on NI and disrupted at least one entry in their election campaign grid.

But the exchange actually raised more questions than it answered.

If the main parties are ruling out further potential sources of revenue, but still committing themselves to eradicating a £90bn black hole in the public finances, will they now be under more pressure during the election campaign to spell out in much greater detail exactly what they intend to cut?

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