The 2.5% VAT rise will cost families almost £400 a year and put 250,000 jobs at risk, Labour leader Ed Miliband has warned.
Campaigning in the Oldham East and Saddleworth by-election, Mr Miliband cited a Liberal Democrat poster from last year’s general election which warned that a “Tory VAT bombshell” would cost households £7.50 a week.
He said there are now only two choices for voters in the January 13 by-election – between the two coalition parties which both support the hike in VAT to 20% and Labour, which thinks the Government is cutting spending “too far and too fast”.
The increase in VAT – which comes in on Tuesday – will add to the cost of everything from a tank of petrol to a mobile phone call, a cup of coffee or a DVD, said Mr Miliband, who described it as “the wrong tax at the wrong time” for the economy and for consumers already facing rising unemployment, petrol at more than £1.20 a litre and inflation at more than 3%.
“The squeeze starts here,” said the Labour leader. “The squeeze designed in Downing Street which will come to your street, to the High Street, to every street up and down the country.”
Mr Miliband said the estimate that the VAT hike would cost families £389 a year was “not my figures, but Nick Clegg’s figures from the last general election, when he went round the country and said ‘stop the Tory VAT bombshell’.
“He didn’t tell us that he would be standing by and applauding as (Chancellor) George Osborne dropped the VAT bombshell.”
The Labour leader said the Conservative-Liberal Democrat coalition was isolated internationally in their plan to eliminate the UK’s national deficit within four years.
“They are following a course that no other major industrial country is following in terms of how far and how fast they are cutting,” he said. “By taking money out of the economy, they put jobs and growth at risk. The VAT rise alone, people tell us, will cost up to 250,000 jobs up and down this country, at a time when unemployment is already rising.”
The full list of candidates in the Oldham East and Saddleworth by-election in alphabetical order are: Debbie Abrahams (Labour); Derek Adams (British National Party); Kashif Ali (Conservative); Peter Allen (Green Party); David Bishop (Bus-Pass Elvis Party); The Flying Brick (Monster Raving Loony Party); Loz Kaye (Pirate Party of the United Kingdom); Stephen Morris (English Democrats); Paul Nuttall (UK Independence Party); Elwyn Watkins (Liberal Democrats).