Page last updated at 10:33 GMT, Sunday, 9 August 2009 11:33 UK

Tories deny plan for 20% VAT rate

Pound notes
Mr Lansley said tax rises would "stifle" the economy

The Tories have "absolutely no plans" to increase VAT to 20% if they win the next general election, shadow health secretary Andrew Lansley has insisted.

On the BBC's Andrew Marr Show, Mr Lansley rejected reports that the move was being "very actively considered".

He said "no such plan" existed and denied reports that "senior level discussions" were held to discuss it.

But Treasury financial secretary Stephen Timms said Tory leader David Cameron "needs to explain" his plans.

'Very clear'

The Sunday Telegraph had suggested that the VAT rise would be introduced by a Conservative government within "weeks" of a Tory election victory.

According to the newspaper, the decision to make the increase part of an "emergency" budget to reduce the UK's debt had been taken by Mr Cameron and Shadow Chancellor George Osborne.

But Mr Lansley insisted that no such decision had been taken.

He said: "As far as I am aware we have absolutely no such plan and I know there have been no such senior level discussions.

"We have been very clear about the need for public spending to be controlled and the priorities that we will have within public spending, including for the NHS.

"We have been very clear about that because we don't want to be in a position where we have to have big tax increases, the effect of which is to stifle the economy."

Andrew Lansley interviewed on the BBC

Shadow Foreign Secretary William Hague told Sky News there were "no plans in existence" to raise VAT but said it would be impossible to rule out any such moves in future as "you can't ask George Osborne to write the 2010 budget now".

But Mr Timms said: "If David Cameron is seriously considering this, he needs to explain why he thinks it's right that ordinary families should pay more tax while he's pledging £200,000 tax cuts for the 3,000 richest estates."

Chancellor Alistair Darling temporarily reduced VAT to 15% from 17.5%.

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