British Prime Minister Cameron has said that he cannot promise to reduce VAT after the next election.
His statement came during a pre-election walk-about in Newark. A market trader there said that the high tax was keeping him from being able to expand his picture framing business.
VAT was cut from 17.5% to 15% to stimulate business by Labour after the financial crash, but raised to 20% by the Coalition in order to reduce the deficit.
Mr Cameron said: “I'm afraid we had to put up VAT to help repair the deficit we were left by the last Government.
“We haven't dealt with the deficit yet. It is down by a third, it will be down a half next year, but I'm afraid we've had to take difficult decisions both on tax and on spending to make sure we live within our means.”
Labour had said it would reduce VAT but the pledge does not appear in the party’s most recent policy pamphlet.
VAT brings £100 billion a year for the Exchequer, and that is due to rise to £127 billion by 2018. Cutting VAT back to 17.5% would cost around £13 billion a year.
