We there is an interesting possible proviso of what may lie ahead in Iain Dale's blog. In his ten predictions for 2010 he predicts that:
"VAT will go up to 20% at some point this year"
Now that is an interesting statement for someone who has recently looked at becoming a Conservative candidate. There are only three possible occasions that VAT could be raised next year, after it goes up on January 1st that is.
The first would be in the budget. The second would be if an incoming Conservative Chancellor wants to radically change things just after a splash and dash budget into General Election failure by Labour. The third would be in the Autumn Pre-Budget Report as Darling did last month.
So does this mean that the Tories are planning to lift the level of the regressive* VAT to 20%. Cameron is talking about fairness. The Lib Dems are promising to lift the income tax threshold closer to the level of the national minimum wage than any of the other main parties is prepared to go. The Lib Dems also recognise that VAT hurts most those on the lowest incomes. The raise in VAT would be vintage conservatism. Its very nature of being the same on all goods means that their wealthy donors don't feel that they are being hard done by.
But historically look at who has made the increases in VAT.
In Geoffrey Howe's first budget for Margaret Thatcher in 1979 the Tories almost doubled the standard rate from 8% to 15%, even the higher rate before then was only 12.5%. The only other Chancellor to take VAT to new heights was John Major in his 1991 budget taking it the 17.5% level. The Major increase was to help fund for a cut in that other regressive tax the Poll Tax, robbing Peter to pay Paul. Darling's cut in 2008 was only a temporary measure one which he felt would act as a stimulus.
Cameron as I said yesterday likes to think that we are more in common, but I don't think there is anything in common about how to raise the Government's finances in a fair way, which is kind of a major issue.
Embarrassing Update: No sooner do I post about the difference's between Lib Dems and Conservative than Sara Bedford points out one of our MP is following in an Anatidae nature.
* Yeah that was even my initial reaction as I live blogged the pre-budget report.