VAT rise 'least damaging option' says BCC chief
British Chambers of Commerce chief David Frost said VAT increase was the best option if tax rises were needed in the current situation
THE BRITISH CHAMBERS OF COMMERCE (BCC) has expressed qualified support for the government’s controversial decision to increase VAT to 20%.
Labour had warned that yesterday’s rise in VAT from 17.5% could cost jobs and stifle the economic recovery, but David Frost, director general of the BCC (pictured), said: “Most business people will tell you there’s no such thing as a good tax rise. But they also recognise that the government has to implement some tax increases alongside spending cuts, and the majority see the rise in VAT as the least damaging option on the table.”
“The government is right to raise taxes on consumption, rather than on
employment or profits. Job creation and business growth would have been
damaged at precisely the time that they are needed most, had the government chosen to place the burden on national insurance or on corporation tax.”
He urged the government to make recruitment easier and support investment and exports.