Major denies 'scare story' of plan for VAT on food: Assurance limits scope for Budget tax rises

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JOHN MAJOR all but ruled out extending VAT on food yesterday, effectively tying the hands of his Chancellor, Kenneth Clarke, prior to the Budget in November.

With humiliating defeats in Thursday's European elections and the Eastleigh by-election looming, the Prime Minister went as far as he could to damp down the view that the unpopular tax could hit such a basic commodity.

In a wide-ranging interview on the BBC's Frost on Sunday, an increasingly Eurosceptical-sounding Mr Major rejected speculation that if the Tories held fewer than 10 Euro-seats after Thursday he would have no option but to quit.

While declining to promise that the scope of VAT would 'never' be enlarged, he said he saw 'no likelihood' of extending it.

Questioned over his refusal on Friday to promise no further extensions of the tax, Mr Major said: 'I see no likelihood that we are going to extend VAT . . . certainly not on food . . . that would be the last thing one would put value added tax on.'

Opposition politicians immediately denounced the assurance as worthless, insisting that it fell far short of his 1992 general election pledge which ruled out the move. Like the conventional 'no plans to' form of words, the Prime Minister's 'no likelihood' formula gives even less guarantee that other potential targets - newspapers and books, fares, children's clothing - will not be brought within the Chancellor's sights. 'We have learnt from experience, saying never, never, never just encourages people to move onto the next item,' Mr Major said.

He accused the opposition parties of operating 'scare politics' - raising fears about VAT and other issues that responsible governments could not knock down.

Harriet Harman, shadow secretary to the Treasury, said that even over VAT on food, the Prime Minister was still 'slipping, sliding, ducking, weaving and diving'.

The final days of Euro-campaigning in which the Tories have sought to occupy safer, and unifying ground, are now at risk of becoming dominated by the domestic taxation issue.

Ms Harman said: 'Next week we will be challenging every Tory MEP candidate to express his views on this and to say whether they will fight the plan to increase the tax on domestic fuel to 17.5 per cent.' Labour will announce its findings on the eve of polling.

Charles Kennedy, the Liberal Democrat president, said: 'The Prime Minister is not be trusted on the VAT issue. He has broken too many promises . . . He says he cannot be specific yet goes as far as he can in ruling out VAT on food. This is only bound to increase attention and anxiety on other areas where VAT may be applied.'

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