Cameron came close to saying it last week in an interview with Sky News. And George Osborne confirmed it yesterday (cited in The Telegraph):

“The plans we set out involved around 80 per cent of the work coming from spending restraint and about 20 per cent from tax increases... The tax increases are already in place, the plans do not include an increase in VAT.”

This is a significant commitment from the Shadow Chancellor. Labour hope to scare voters with the threat of a large VAT increase if the Tories win. Cameron and Osborne have attempted to strangle this attack at birth.

The commitment means that spending cuts will have to be significant in years two, three and four of any Tory government. At the weekend George Osborne said that year one cuts would not exceed £6.5bn. Policy Exchange has warned that mortgages could cost £1,400 more per year if the deficit isn't cut.

Tim Montgomerie