Alistair Darling’s pre-budget report this week highlighted plans to pacify the British public, and inject some life back into the economy, by reducing VAT to 15% until January 2010. However, due to a leaked treasury document, the sweetener has been soured by the news that by 2011 it will possibly swing the other way... all the way up to 18.5%.
The Conservative party have pounced on the news, claiming that the planned tax cut was simply a way for Labour to win voters in the lead up to an election; after which time they will be forced to raise taxes again to make up for the massive £12 billion deficit that will occur as a result.
The Shadow Chancellor, George Osbourne, said: “This is Labour’s secret tax bombshell. It explains why there is a black hole in the PBR, because at the last minute Gordon Brown clearly decided to keep secret his plan to hit everyone with an extra tax rise to pay for his borrowing binge.
“These documents show that Labour was planning to deceive the British public, and will raise VAT on everyone after the election.”
After all of the economic turmoil of the last year, it stands to reason that the shortfalls in the public pot will have to be made up... and its not a surprise that it will have to come out of the taxpayer's pocket. We need action from the government if we are to lift ourselves out of this slump, so we may just have to tighten our belts and prepare for the worst.
By Danielle Williams
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