Election 2017: Prime Minister Theresa May promises not to raise VAT

May 1, 2017
| Report Focus News

Labour and the Conservatives have traded blows over their tax plans, with Theresa May hinting at possible rises in national insurance while shadow chancellor John McDonnell said Labour would introduce a “fairer” system that taxed the rich more.

Both parties pledged to freeze VAT at 20 per cent and insisted they would protect low and middle earners from higher tax bills. Mr McDonnell claimed Labour would end “tax giveaways to the corporations and the rich” under the Tories, while Mrs May insisted a Labour government would mean higher taxes for all.

| Report Focus News

Under direct questioning in the first live TV interviews of the election campaign, Mrs May would not confirm whether the Tories would retain their “tax lock” pledge that includes ruling out rises in income tax or national insurance.

The Prime Minister was challenged over claims from the Royal College of Nursing that the 1 per cent cap on public sector pay increases was forcing some nurses to go to food banks,

She was also forced to deny claims her campaign has been “robotic” after a series of tightly stage-managed appearances that have repeated key messages.

Mrs May faced criticism following her first campaign stop in Scotland, which saw her deliver a stump speech in a community hall in the Aberdeenshire town of Banchory to an audience of invited Conservative activists.

Stuart Donaldson, the SNP MP for West Aberdeenshire and Kincardine, said: “Theresa May has confirmed the real cost of voting for the Tories – continued austerity, continued reliance on foodbanks, cuts to education spending that will hit Scotland’s budget, and uncertainty for pensioners who will be hit in the pocket.

“We have had nothing by empty rhetoric from the Prime Minister who is running from scrutiny. She is refusing to participate in TV debates, and just yesterday on a flying visit to Scotland, she was hiding in a village hall in my constituency rather than speaking to voters.”

Speaking on the BBC’s Andrew Marr Show, Mrs May said: “We have absolutely no plans to increase the level of tax but I’m also very clear that we don’t want to make specific proposals on taxes unless I’m absolutely sure that I can deliver on those.”

She later added on ITV’s Peston on Sunday: “We have no plans to raise the level of tax. In relation to specific taxes, we won’t be increasing VAT.”

The Prime Minister had been challenged to give a commitment on not raising VAT by the shadow chancellor, who appeared on Peston on Sunday just before Mrs May.

He said: “If you remember last time the Tories promised no increase in VAT and then they increased it afterwards… that’s a regressive tax, that falls on some of the poorest and middle earners as well, so that’s one guarantee we’re giving.”

The shadow chancellor said Labour would set out details of who it would ask to pay more tax in its manifesto. Mr McDonnell was criticised at the start of the election campaign for suggesting those earning £70,000 were “rich” and should be charged more.

There were further signals from the Prime Minister that she plans to review another pledge, the “triple lock” on pension increases, after she highlighted “long-term issues about the ageing population” as one of the key challenges for the next government.

Mrs May repeated a commitment that pensioner incomes would continue to increase, but said “exactly how we calculate that rise” would be set out in the party manifesto. The Prime Minister has come under pressure from Labour and the SNP over the future of triple lock, which ensures the state pension increases in line with wages, inflation or by at least 2.5 per cent, but has refused to say it will be retained if she is re-elected.

Reports suggest Downing Street is considering a less generous “double lock”, freeing up additional revenue to spend on the under-pressure social care system in England.

Mr McDonnell criticised the Tories’ failure to commit to the policy, claiming: “If they break the triple lock it’ll be some of the poorest that lose out. It’ll be young people for the future… I do not want pensioners going back into poverty again.”