Chris Leslie MP, Labour’s Shadow Chief Secretary to the Treasury, has written to George Osborne to ask him to urgently clarify how the Prime Minister’s unfunded tax commitments will be paid for:
You will be aware of the confusion that has followed the Prime Minister's promises of unfunded tax commitments after his speech to your conference on Wednesday. I am writing to ask that you urgently clarify how these promises will be funded and paid for.
On Thursday Grant Shapps was asked by Jo Coburn on the BBC Daily Politics "are you ruling out a rise in VAT?" and he replied "Well I have absolutely no intention of writing future Budgets on your programme".
Yet in today's Sunday Express newspaper when asked whether any tax promises would be funded by other tax rises Mr Shapps is quoted as saying: "We won't do it. Ain't gonna happen. Our income tax cuts will not, repeat not, be funded by hiking other taxes."
Can you clarify what your position is on this? Are you also promising that there will be no changes to VAT or 'other taxes' in the next Parliament? I understand that you have accepted that the costing of the Prime Minister's tax promises amounts to more than £7billion – so can you now set out where the money will come from to pay for these? Can you confirm that this is the equivalent of raising VAT to around 21.5%? Or do you intend to add this to your future borrowing plans?
The Prime Minister himself said before the last election, "you can't talk about tax reduction unless you can show how it is paid for, the public aren't stupid". And you said yourself in November 2008 that "real tax cuts are funded, real tax cuts you show how you are going to pay for them. Where you have unfunded tax cuts they are tax con and that is the dividing line in British politics."
What has changed? Five days on from the Prime Minister's speech and not one Minister has been able to tell us where a single penny of the money to pay for these promises will come from.
In particular, can you categorically rule out raising VAT on families and pensioners again in the next Parliament? The Conservatives have a track-record of raising VAT after elections, despite claiming beforehand that you have no plans to do so.
You will therefore understand why, until you set out where the £7 billion is coming from, people will judge you on your track record of hitting working people while giving tax cuts to millionaires.
If it's not VAT, where is the money going to come from – and which families and public services will pay the price?
I'm sure you will want to clarify this matter at the earliest opportunity and given the public interest in this matter I will be making this letter available to the media. I look forward to hearing from you shortly.
Chris Leslie MP"