GORDON Brown yesterday hit back in the “tax on jobs” row, accusing the Tories of working out their National Insurance plans on the “back of an envelope”.
At his first press conference of the campaign, the Prime Minister released an 11-page dossier rubbishing Tory proposals to reverse next year’s one per cent hike in National Insurance for 70 per cent of workers.
The Conservatives say they would fund the move by finding a further £6bn in government efficiency savings, but Brown dismissed this as a “fantasy” and said the Tories would end up cutting front-line services.
Meanwhile, the Liberal Democrats waded into the row, releasing a campaign poster warning that the Tories were planning a “VAT bombshell” to pay for their National Insurance policy.
Lib Dem leader Nick Clegg said the Tory policy would cost £13.5bn, forcing them to increase VAT from 17.5 per cent to 20.5 per cent. That would amount to an extra £389-a-year for the average family, Clegg said.
William Hague, the shadow foreign secretary, told the Lib Dems to pipe down and said the Tories had “no plans” to raise VAT. But opponents believe that the Tory position leaves them enough wriggle room to hike the tax after the election.
Labour sources said their manifesto, which was approved last night, contains a pledge to keep VAT at 17.5 per cent on some – but not all – goods for the entirety of the next parliament.