Ministers considered raising VAT over 18.5%, admits Brown

Ministers considered raising VAT over 18.5%, admits Brown

The row over "secret" Treasury plans to increase VAT escalated today as Gordon Brown admitted a proposal to raise it above 18.5% had been considered.

The prime minister said "all options" were looked at but the government decided to lower value added tax to help hard-pressed families.

Heated exchanges during prime minister's question time came after the Treasury was last night forced to deny there was a secret plan to raise VAT to 18.5% in the next parliament.

The measure was contained in a Treasury background document mistakenly published on the internet.

In the Commons, David Cameron, the Tory leader, asked why, if there was no such plan, the document had been signed off by Treasury minister Stephen Timms.

The prime minister said ministers had considered the proposal but rejected it in favour of a VAT cut.

Advertisement starts

---

---

Advertisement ends

Cameron then asked the prime minister whether there had been a plan to the increase VAT above 18.5% and he suggested he would use freedom of information legislation to ascertain the information if necessary.

Brown replied: "We looked at all options; we rejected the option of increasing VAT… we decided we would lower it and I hope he will support that."

Cameron retorted: "It is absolutely clear, they are planning a VAT bombshell to hit every member of the country."

Brown accused the Tories of being the "do nothing party".

Cameron said: "The country is going bankrupt, the government's been found out and new Labour is dead…. There is a black hole at the heart of public finances."

guardian.co.uk © Guardian Newspapers Limited 2008