Theresa May ditches Conservative 'tax lock' pledge, but rules out VAT rise

Posted On: 
30th April 2017

Theresa May has all but confirmed that the Conservative manifesto will not repeat the pledge not to increase income tax, VAT or national insurance. 

Conservative leader Theresa May on the Andrew Marr Show this morning
BBC iPlayer

The Prime Minister said the so-called “tax lock” would be scrapped because she did not want to make promises without being “absolutely sure” she could deliver on them.

But she did rule out increase VAT beyond its current level of 20%. 

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She also strongly suggested that the Conservatives would not keep in place the “triple lock” ensuring the state pension rises by at least 2.5% per year throughout the next Parliament.

The tax lock forced Chancellor Philip Hammond into an embarrassing U-turn after his Budget, when he tried to hike national insurance contributions for self-employed workers.

In an interview with the Andrew Marr Show today, Mrs May ditched the commitment.

“We have absolutely no plans to increase the level of tax but I’m also clear I don’t want to make specific proposals on taxes unless I’m absolutely sure I can deliver on those,” she said.

“But it would be my intention with a Conservative government and a Conservative prime minister to reduce the taxes on working families…

“When people come to look at this decision at the next election on 8 June, they will have a choice between a Conservative party that has always been a low-tax party, that actually over the last few years has taken four million people out of paying income tax altogether, and a Labour party that is about raising taxes, that is about higher taxes for the future.”

She later added on ITV’s Peston on Sunday: “We won’t be increasing VAT." 

Shadow Chancellor John McDonnell said this morning Labour would not increase VAT at all, or income tax on “middle and low earners”.

The triple lock, which dictates that the state pension rises by the highest of average earnings, inflation or 2.5%, was introduced by the Coalition government and repeated by the Conservatives before the last election.  

But Mrs May indicated that the pledge would not be in the party's new manifesto.

She said: “Under a Conservative government, the state pension will still go up every year of the next Parliament. Exactly how we calculate that increase will be for the manifesto.”

Elsewhere, the Prime Minister said the Tory manifesto would bring forward proposals to solve the long-term social care crisis and ruled out changing her mind and agreeing to take part in televised leader debates.