Holiday | LifestyleLetters to the editor

Tax Bombshell

29/11/2008 00:00

by RAY FLEMING
DAVID Cameron's secret tax bombshell has turned out to be a damp squib. The explosive device was supposed to be found in background website briefing provided by the UK Treasury about changes in VAT rates. This explained that the current standard rate of 17.5 percent would be reduced to 15 per cent from next Monday until 1 January 2010; there then followed the phrase that has caused so much parliamentary and media trouble: ...and subsequently increased to 18.5 per cent in 2011-12.

This phrase did not, however, appear in the official printed version of the VAT changes - leading to excited charges by Mr Cameron that Labour might increase VAT to 18.5 per cent or even to 20 percent if returned to power at the next election and was hiding that possibility.

In the Commons neither the prime minister nor the chancellor of the exchequer denied that that such an increase had been reviewed. The reference on the website reflected that fact but should have been deleted before it was posted because ministers had decided against it. An error of this kind is regrettable but understandable given the intense pressure under which ministers and their officials work prior to major policy statements. Public policy cannot be made if ministers are not presented with a range of options to consider - most of which they will reject. Opposition leaders know this and should not jump on a discrepancy in documents before first checking quietly through the usual channels which is the authentic text.