David Cameron trips up Labour campaign by pledging not to increase VAT

In a surprise announcement at Prime Minister’s Questions that plunged Labour’s campaign into crisis, he rejected a rise in the 20 per cent tax if the Tories return to government after the general election on May 7.

Asked by the Labour leader to rule out a VAT rise, Mr Cameron said: “Straight questions deserve straight answers, and the answer is yes.”

His answer left Tories jubilant and Labour MPs appearing despondent at the final leaders’ clash in the Commons before polling day.

Labour MPs feared their leader had stumbled into a trap after Chancellor George Osborne spent days declining to answer questions about VAT.

A senior Tory source said yesterday: “We are ruling out any rise in VAT in the next parliament.”

Labour aides are understood to be pulping thousands of leaflets accusing the Tories of planning to increase VAT.

Mr Cameron’s wife and eldest children Nancy, 11, and Elwen, nine, were in the Commons gallery to watch the crunch final PMQs of the parliament.

The children, in school uniform, smiled and laughed as their father tore into the Labour leader.

After dismissing a VAT rise, Mr Cameron went on the offensive by repeatedly challenging Mr Miliband to rule out hitting millions of businesses and employees with a hike in national insurance contributions.

**CLICK HERE FOR ED MILIBAND AND DAVID CAMERON IN PICTURES**

“Straight answer from me, straight question to him; I have ruled out VAT, will he rule out national insurance contributions? Yes or no?” the Prime Minister taunted.

Clearly wrong-footed by the unexpected answer about VAT, Mr Miliband pleaded: “No one is going to believe it.”

He repeatedly declined to rule out a national insurance rise.

Mr Cameron dismissed accusations he was a “lame duck” and said Mr Miliband was a “poodle” prepared to do the bidding of the Scottish National Party.

“Never mind talk of ducks; I am looking at Alex Salmond’s poodle,” the Prime Minister said.

Immediately after the clash, a senior Labour aide accused the Tories of “making up policy on the hoof”.

Yet within two hours, shadow chancellor Ed Balls suddenly ruled out Labour raising national insurance after the election.

Mr Balls said: “We will make it clear in the manifesto Labour will not be raising national insurance.

"That will be a clear pledge from us.”

Mr Osborne said last night: “Labour’s economic policy is in crisis today. “They oppose all spending cuts, say they’ll balance the books and now expect people to believe they won’t put up taxes including the jobs tax.

"It simply doesn’t add up.

“Ed Miliband and Ed Balls really are making it up as they go along.”