VAT increase better than NI rise, claims Osborne
Chancellor says VAT increase is a better move than increasing NI - a tax on jobs - claims George Osborne
The chancellor has defended his policy of increasing VAT to 20% – while criticising Labour’s suggestion that it would rather increase national insurance as having a “more damaging impact on poorer people in our society”.
The VAT increase would increase employment as it would signal the government’s intent to tackle the deficit, said George Osborne, reported the Telegraph.
Shadow chancellor Alan Johnson said Labour had stuck by its policy of maintaining the VAT rate while looking to increase NI.
“[The VAT increae] does nothing for jobs and growth – this year has to be all about continuing the growth momentum. It hits the poorest hardest. For those three reasons this is the wrong tax at the wrong time,” said Johnson.