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David Cameron yesterday used his first television
interview in office to insist that the bulk of cash
needed to repay the Government’s record debt will come
from public spending cuts rather than tax rises.
Speaking on BBC1’s Andrew Marr Show, he declined to
dismiss reports that VAT will rise from 17.5 per cent to
at least 20 per cent. Repeatedly asked to rule out the
rise, he said: “You’re going to have to wait for the
first Budget. But we’ve said very clearly we don’t
believe that tax should be bearing the burden of this.
It’s going to be about reducing spending.”
He added: “In our coalition agreement the proportion of
tax versus spend is pretty close to what we were arguing
for in the election.”
High-street retailers are reportedly already preparing
new prices to take account of a sales tax hike. One
chain, with annual sales of more than £10 billion, was
reported to be printing price tags on clothing and other
goods for sale next year including VAT at 20 per cent.
Experts yesterday estimated that the sales tax rise
could add £216 to the average household’s annual living
costs.
Mr Cameron said he and his Lib Dem partners agree the
tax policy priority was to stop Labour’s “most damaging”
plan to raise National Insurance. But he appeared to
concede that Capital Gains Tax on private assets will
rise from 18 per cent to up to 50 per cent, in line with
income tax rates. He said: “When you have a capital
gains tax rate of 18 per cent and a top rate of income
tax at 50 per cent, you’ll find people finding all sorts
of ways to treat income as capital gains.”
In the same interview, Mr Cameron risked exacerbating
fears that his coalition deal will ditch traditional
Tory policies. Adopting Labour language, he described it
as a “progressive alliance”.
He sparked further jitters by insisting that Lib Dem
Deputy Prime Minister Nick Clegg is a key member of his
inner circle.
He said his deal with the Lib Dems was “very much in
line with some of the things I’ve been saying over a
five-year period”.
He added: “We use Conservative and, yes, Liberal
Democrat means to achieve those progressive ends.”
Hiring and firing ministers was now a joint task, he
said. “When it comes to Government appointments and – if
I can put it this way – disappointments, of course
that’s the Prime Minister’s job. But this is going to be
something that we try to do together. I think that’s
important.”
Mr Cameron, who denied that he was “burying the old
Conservative Party”, also revealed he would take on Tory
critics of his plan to introduce fixed-term, five-year
Parliaments that can only be cut short by a vote of 55
per cent of MPs. “This is a big surrender of prime
ministerial power,” he said. “I think it’s a really good
thing.”
Source:
Express.co.uk, United Kingdom, dated 17/05/2010
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