Labour Party Rules Out VAT Increase if Elected

The UK's Labour Party confirmed it will not increase value-added tax if it wins the July 4 election. Finance spokesperson Rachel Reeves responded to Conservative claims by asserting that Labour would not raise income tax, national insurance, or VAT. VAT is the government's second-largest source of tax revenue, raising £198 billion last year.

The UK's Labour Party has confirmed it will not increase value-added tax (VAT) if it wins the upcoming election on July 4.

Finance spokesperson Rachel Reeves made this clear in response to Conservative finance minister Jeremy Hunt's claims that Labour had not ruled out such an increase.

Hunt stated in the Daily Telegraph that the Conservatives would not raise VAT in the next five-year parliamentary term and criticized Labour for not making a similar commitment.

Reeves countered, asserting that Labour would not increase income tax, national insurance, or VAT.

VAT, currently set at 20%, is the government's second-largest source of tax revenue, raising £198 billion in the year to April.

Reeves reiterated that Labour has no plans for significant tax increases beyond minor changes already announced, such as charging VAT on private school fees.

The Institute for Fiscal Studies recently warned that any party in power would face challenges meeting budget rules without raising taxes or cutting public services.

According to March budget forecasts, tax as a share of national income is set to rise to its highest level since 1948.