Osborne accused of deliberately misleading committee on VAT

Right-Wing Watch

Labour MP says the chancellor set a trap for Ed Miliband which amounts to 'a very major democracy issue'

 

Labour MP John Mann has accused George Osborne of ‘the most serious breach of the select committee system in parliamentary history’. Speaking on the Today programme, Mann said that the chancellor’s obfuscation over the issue of VAT was a set-up designed to wrong foot Ed Miliband at Prime Minister’s Questions.

On Tuesday, George Osborne appeared before the Treasury Committee, which included Mann, and refused five times to rule out a VAT rise. He skirted the question in various ways:

“We do not need to increase VAT because our plans involve saving money on the welfare budget and government departments.”

“I have identified where the £30bn of savings I believe need to come from and they don’t involve a VAT rise,”

“[The Labour] party is proposing very substantial tax rises; I suspect that will be VAT, or jobs or income tax.”

Then, at yesterday’s PMQs, Ed Miliband challenged David Cameron directly on the issue:

“Here’s a straight question: Will he now rule out a rise in VAT?” 

To Miliband’s evident dismay, the prime minister responded:

“He’s right, straight questions do deserve straight answers. And the answer is ‘yes’.”

Cue deafening crowing from the Tory benches and a floundering Miliband.

But John Mann is accusing the chancellor of going beyond standard political game playing, and says that his behaviour on Tuesday amounted to contempt of parliament. He said:

“If the governor of the Bank of England or the head of the financial regulator said that they would have to resign.

“For the chancellor to mislead the committee and then for it to be a political set up for the next day what it does it it brings into disrepute the whole committee system.” 

Last night Business minister Matt Hancock appeared on BBC Newsnight, letting slip that Osborne knew about the VAT promise before the meeting of the Treasury Committee, and that the information had been deliberately withheld:

“There was obviously a decision not to announce a new policy in that forum but instead to announce it at Prime Minister’s Questions.”

Mann then immediately tweeted:

Inevitably, some will discount Mann’s allegations and accuse Labour of being sore losers after yesterday’s embarrassing episode.

Ruby Stockham is  a staff writer at Left Foot Forward. Follow her on Twitter

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25 Responses to “Osborne accused of deliberately misleading committee on VAT”

  1. Leon Wolfeson

    That’s complete backwards thinking, and ignores the way which your beloved austerity has been extremely expensive. And your answer is to keep slashing spending, which makes the deflation worse.

    *Anything* but the simply, direct, sensible answer of spend.
    Because the result of spending is inflation. And we’re going to be deflating!

    Again, the sort of scale of cuts you’re defending will massively shrink the economy and let’s talk about mass food aid for the poor, like other third-world nations.

  2. Selohesra

    They repeatedly made clear they had no plans to raise VAT – and they dont. What could be clearer than that – trouble was Mann grandstanding in the spotlight thought he had won a coup – now looks a little silly. Labour brought this one on themselves and unnecessarily so.

  3. Gareth Hunt

    At 20% we have one of the highest rates in Europe. Hungary at 27% has a crippled economy and nothing needs to be said of Greece with 23%. The Tories are being very clever by ruling it out. It would be catastrophic to go above 20% and they know that – going from 17.5% to 20% over the past five years only brought UK VAT in-line with Europe. It makes sense for them, in a political campaigning sense, to weaponise VAT as a way they can belittle Labour – same way Labour have weaponised the NHS. It worked! (on both counts!)

  4. Gareth Hunt

    The issue, in an electoral sense, surrounding the use of food banks, cuts to JSA and zero hours contracts only really affects around two million people in the UK (with 1.86m on JSA, around 900,000 according to the Trussell Food Bank Group using Food Banks). This potential pool of ‘prospective’ voters isn’t the target of the Coalition government’s policy thinking.

    The ‘middling’ classes are the true targets of the Coalition government policy-making endeavours. The vitriolic attacks in the Daily Mail or the Sun who target benefit ‘cheats’ or ‘scroungers’ is designed purely as an “us versus them” groupthink mentality that make the cuts palatable in the minds of the tens of millions in the ‘middle classes’. These tax-paying, home-owning families are the Coalition’s target (and Labour too), they vote more regularly and as such more useful to the political classes.

    Cutting benefits to ‘scroungers’ is popular in the polls. The Mail/Express/Sun have defined the narrative leading up to this General Election with years of negative headlines targeting benefit cheats, food bank cheats and other minority behaviour surrounding welfare. It is true that some people have miss-claimed benefits but the majority have not. This change in groupthink by the ‘middle classes’ makes it easier for the Coalition to continue to pursue austerity.

    However, to argue that this would mean ‘mass instant poverty for millions’ is naïve. A Conservative government would not, in terms of simple public relations thinking, undertake such drastic action. There will be reductions, but to think of instant poverty is misleading. The ‘middling classes’ whilst thinking scroungers exist are incredibly kind. Britain, and the demographics of the middle classes, donate more to charity than many of their European or American brethren. It would be wrong to think they would sit back and watch the wholesale destruction of the welfare state just because the Sun or the Mail say it’s okay? But then again, they sat back during the Thatcher years and the Blair years. So who know?

  5. Gareth Hunt

    You are right that spending pushes up inflation but it’s not just Government spending but the spending of everyone within the economy from charities, plcs, limited companies right through to individuals.

    For example, business investment has grown four times faster than household consumption. This is a simple enough marker that shows austerity hasn’t negatively impacted the economy.

    Finally, its simply irrational to think cuts will shrink the economy and cause food aid and mass poverty – liking Britain to a third world country??

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