VAT rise will cost jobs
May 28 2010
“Consumer spending will be hit by VAT increase”
As many as 163,000 jobs could be lost in the next four years if VAT is increased, warns the British Retail Consortium.
In its first year, a VAT rate of 20 per cent would reduce the deficit by £11.3 billion but by the end of that first year there would be 30,000 fewer jobs in the UK, across all employment sectors – than if there had been no increase, it claims.
Stephen Robertson, director general of the BRC, says: ‘The budget deficit is serious. It has to be tackled but proposals must be judged against the implications for jobs and growth revealed by this new information.’
The BRC has urged the government to prioritise public spending cuts over tax rises to tackle the budget deficit, as well as to aim to half the deficit over four years rather than the proposed three.