Treasury in VAT rise row
The government and the Conservatives have become embroiled in a row over an apparent future VAT rise.David Cameron, the leader of the opposition, said that a Treasury document which apparently showed plans to increase the sales tax to 18.5 per cent in 2011, was "a secret tax bombshell".Treasury minister Angela Eagle subsequently dismissed this as "scaremongering", while the government says that the tax raise was a proposal for this week's pre-Budget report (PBR) that has since been decided against.In his PBR statement earlier this week, Alistair Darling unveiled a VAT cut, effective in December, as part of his economic stimulus package designed to ward off the worst effects of the recession.However, the government also proposes raising income tax for high earners and National Insurance after the next election, in order to pay for this extra spending.Speaking to the BBC, Mr Cameron said that the VAT cut proposal explains why the PBR "doesn't add up".He added: "That's why there's such a big black hole there's a secret tax bombshell coming down the road at every family in the country."
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