David Cameron is set to promise a law banning any rise in income tax, VAT or national insurance in the next parliament, as he attempts to inject momentum into his campaign, in a move described by Labour as a “desperate gimmick”.
The prime minister will on today (29 April) deliver the latest in a string of offers by both leading parties in the closely fought campaign, promising a law guaranteeing no increases in income tax rates, no rise in VAT or widening of its scope or any increases in national insurance before 2020.
Mr Cameron will say: “It is in fact the first law of politics: it’s Labour who put up your taxes and Conservatives who cut them.”
The move in a campaign which has seen the main parties increasing seeking to shore up a transient base rather than appeal beyond their core vote, would severely tie the chancellor’s hands in the event of an economic shock, according to FTAdviser sister the Financial Times.
Labour labelled the tax lock a “desperate gimmick” and warned yesterday (28 April) that the Tories would reduce tax credits to working families instead.
Yesterday (29 April), data published by the Office for National Statistics showed UK GDP grew by 0.3 per cent in the first three months of this year.
This was lower than the 0.6 per cent growth seen in the previous quarter and lower than the 0.5 per cent predicted by economists. Out of the major economic sectors, only services grew in the quarter by 0.5 per cent, while the construction, production and agriculture sectors all contracted.
The quarter-on-quarter growth of 0.3 per cent meant the UK economy had expanded by 2.4 per cent compared to the same time last year. The news caused the value of sterling to drop by nearly 0.5 per cent against the US dollar.
Labour claimed the data showed the economy was not delivering for working families. Mr Cameron tweeted that they showed “we can’t take the recovery for granted”.
Some economists, however, maintained that consumer spending was likely to pick up this year and that the data do not represent the start of a serious slowdown.