GEORGE Osborne yesterday said the Conservative party would not raise taxes if the party wins the 2015 general election, setting the tone for the forthcoming contest.
Even though any future government will still be struggling to cut the annual deficit, the chancellor indicated that the welfare budget would be cut to meet his target of reducing spending by £23bn during 2017 and 2018.
“The further consolidation after 2015-16 is built into the tables as a spending reduction,” Osborne told MPs yesterday. “I am clear that tax increases are not required to achieve this. It can be achieved with spending reductions.”
He also claimed Labour would not make a similar commitment: “I’m not sure whether they would do big tax increases. I suspect they would, but that is for them to explain.”
Labour said the only reason the deficit will still exist after 2015 is because Osborne’s growth policies have failed.
Osborne has traditionally sought to cut the deficit with 80 per cent spending cuts and 20 per cent tax rises, such as increases to VAT.
Last month the Institute for Fiscal Studies suggested that if Osborne sticks to this model he would have to raise taxes by £6bn a year to meet deficit reduction targets. But following yesterday’s intervention the burden could now fall on benefits and Whitehall departments.
Osborne also told journalists at a press lunch that he would announce a tax break for married couples in the Autumn Statement, usually held in the final two months of the year.
The move, designed to please Tory backbenchers, is likely to be worth around £150 to couples where one partner either does not work or receives very low wages.