Cameron tax law could cause ‘monumental damage’ says bank

David Cameron's pledge to enshrine in law a promise not to raise income tax, VAT or National Insurance is unraveling already

 

Prime minister David Cameron’s pledge to enshrine in law a promise not to raise income tax, VAT or National Insurance in the next parliament risks doing “munumental damage” to the British economy in the event of an economic downturn, according to a major bank.

This morning David Cameron set out a ‘five-year lock’, promising to introduce a law to prevent further tax increases before 2020 if the Conservatives win power.

But according to Steve Barrow, head of G-10 strategy at Standard Bank, the plan “could cause monumental damage if it has to be defied in the event of a deterioration of the economy”.

Speaking to Bloomberg Business, Mr Barrow also said it showed the Conservatives were “the more desperate party” ahead of next week’s election.

Standard Bank London is the international merchant banking arm of South Africa’s Standard Bank Group, the largest African bank by assets.

Prior to the 2010 election, David Cameron said he had “absolutely no plans” to raise VAT. But soon after coming to power his government announceed a rise in VAT from 17.5 per cent to 20 per cent.

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

13 Responses to “Cameron tax law could cause ‘monumental damage’ says bank”

  1. James Chilton

    This legally binding pledge not to raise income taxes etc., wasn’t enshrined in the Tory manifesto. Presumably, an equivocation is buried in today’s promise.

  2. Carlton Newman

    Tory promises…. If you believe those I’ve a bridge in London I can sell you….

  3. Nigel de Gruchy

    Unnecessarily closing down options for 5 years in today’s uncertain world is a monument to stupidity.

  4. JAMES MCGIBBON

    If they win the election then they can do what they want for the next five years. Seems a bit silly and no point to it.

  5. JAMES MCGIBBON

    If they win the election then they can do what they want for the next five years. Seems a bit silly and no point to it.

  6. jan hamilton

    more lies and bluster, remember the last election.. oh we won’t increase
    VAT… what happened in June ?? and why should it be made law.. as
    ever i see some ulterior motive here.. just can’t figure it out yet

  7. Selohesra

    No need – since no one will be winning a majority whoever gets in can renege on anything they choose and blame it on coalition politics

  8. jan hamilton

    *can’t figure it out* … hmmm think i’ve sussed it out or at least made headway .. allegedly he’s not going to increase NHI .. they very thing that pays for our social security and hospitals, sly move indeed, no extra funds via nhi… ooohhh whine moan, we’ll have to sell the NHS off (even more than we already have!) and well we’ll just have to slash/remove even more benefits from the most vulnerable, chroncically sick and disabled. and just because he might make it a law.. laws can be altered.. as we know by IDS and his nasty manoeuvres

  9. sarntcrip

    A WEEK TO GO YOU CAN’T BELIEVE ANYTHING ANY OF THEM SAY FROM OW JUST JUDGE THE INCUMBENT ON THE LAST 5 YEARS AND ALL THE BROKEN PROMISES, DIVISION AND PLAIN NASTINESS

  10. jan hamilton

    I’m hard pressed to believe anything they say as it is, i always look for the ulterior motive. Oh there will be wondorous promises being trotted out in the final desperate hours, all of it total bullshit .. pretty much like the past 5 years then ! god help us if they ever get in again as they will see it as a green light to do just as they please with the excuse well this is what people voted us in for. Never mind Scamoron is an unelected squatter in No 10 as it is

  11. Leon Wolfeson

    And Boris has ended up making his vanity bridge cost the taxpayer, too.

  12. Leon Wolfeson

    It’s not “don’t believe”, it’s “what did he mean”.

    For example, “we’re all in together”. He didn’t mean Britain, he meant Tory MP’s.
    And so on.

    He was definitely elected though, largest party and all that.

  13. Leon Wolfeson

    If they broke it, mind, they’d be pilloried as the LibDems were for their breaking their University fees pledge. So it’s actually a pretty strong promise.

    And they’re talking about creating a law to constrain their own freedom of action.So silly.

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