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Last minute dash to beat the tax hike as Miliband warns VAT rise will put 250,000 jobs at risk

احدث اجدد واروع واجمل واشيك Last minute dash to beat the tax hike as Miliband warns VAT rise will put 250,000 jobs at risk

  • Experts claim increase could cost families £520 extra per year
  • Labour leader Ed Miliband claims the move is 'too far, too fast'

Shoppers and motorists made a last ditch dash for the tills today to beat the VAT hike.

VAT goes up from 17.5 per cent to 20 per cent at midnight leading to lengthy queues on petrol forecourts and in shops.

For motorists it is the second hit in just four days after fuel duty went up on January 1.  

Point-scoring: Labour leader Ed Miliband on the campaign trail in Oldham today, where he criticised the Tories' decision to raise VAT by 2.5 per cent to 20 per cent

Point-scoring: Labour leader Ed Miliband on the campaign trail in Oldham today, where he criticised the Tories' decision to raise VAT by 2.5 per cent to 20 per cent

And Labour leader Ed Miliband slammed the increase - claiming the move was 'too far and too fast' and would put 250,000 jobs at risk.

The rise will hinder economic growth and make it even harder for families struggling to make ends meet, he said.

 

    He estimated the hike would cost the average family £389 a year - but other experts have calculated it could cost families as much as £520.

    The increase in the sales tax could not come at a worse time for a nation suffering the biggest squeeze on living standards for almost 30 years.

    It will put around 3p on a litre of petrol, 6p on a pint of lager, £10 on a man's suit, £80 on a sofa set and more than £300 on a new car.

    Electrical goods, phone bills, restaurant meals and holidays will also be more expensive after the 2.5 percentage point rise from 17.5 per cent.

    Campaigning in the Oldham East and Saddleworth by-election, Mr Miliband cited a Liberal Democrat poster from last year's general election, which warned that a 'Tory VAT bombshell' would cost households £7.50 a week.

    He said there were now only two choices for voters in the January 13 by-election - between the two coalition parties which both support the hike in VAT to 20 per cent and Labour, which thinks the Government is cutting spending 'too far and too fast'.

    The increase in VAT will add to the cost of everything from a tank of petrol to a mobile phone call, a cup of coffee or a DVD, said Mr Miliband, who described it as 'the wrong tax at the wrong time' for the economy and for consumers already facing rising unemployment, petrol at more than £1.20 a litre and inflation at more than 3 per cent.

    'The squeeze starts here,' said the Labour leader. 'The squeeze designed in Downing Street which will come to your street, to the High Street, to every street up and down the country.'

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    Petrol queues

    Queues: People across the UK filled their tanks today before the VAT increase pushed up prices even further

    Time to cut down: Shoppers were out in force today as they try and beat the VAT hike. Families will be a lot worse off this year, warn economists, with every household affected by the rise

    Time to cut down: Shoppers were out in force today as they try and beat the VAT hike. Families will be a lot worse off this year, warn economists, with every household affected by the rise

    Mr Miliband said the estimate that the VAT hike would cost families £389 a year was 'not my figures, but Nick Clegg's figures from the last general election, when he went round the country and said 'stop the Tory VAT bombshell'.

    'He didn't tell us that he would be standing by and applauding as (Chancellor) George Osborne dropped the VAT bombshell.'

    The Labour leader said the Conservative-Liberal Democrat coalition was isolated internationally in their plan to eliminate the UK's national deficit within four years.

    'They are following a course that no other major industrial country is following in terms of how far and how fast they are cutting,' he said.

    'By taking money out of the economy, they put jobs and growth at risk. The VAT rise alone, people tell us, will cost up to 250,000 jobs up and down this country, at a time when unemployment is already rising.'

    Speaking alongside Labour candidate Debbie Abrahams, Mr Miliband said the Oldham East and Saddleworth by-election offered voters the opportunity 'to send a message to this Government that they are getting it wrong'.

    The constituency was a three-way marginal in last May's poll, with Labour defeating the Liberal Democrats by only 103 votes and Conservatives less than 2,500 votes behind them.

    But Mr Miliband said: 'There are only two choices at this election. Do you support candidates who will support the VAT rise, who will support police cuts, who will support the betrayal of the people of Oldham East and Saddleworth? Or do you support Debbie Abrahams?'

    But theres still time to grab a bargain.jpg

    VAT does not apply to most food, but is added to chocolate bars, fizzy drinks and household essentials such as washing detergents, pet food, shampoo, soap and beauty products.

    Some retailers, particularly supermarkets, began pushing up prices to reflect the higher rate of VAT just before Christmas.

    And until February 1, stores are being allowed by the Government to apply the 20 per cent rate by marking up the price paid at the till, rather than on shelf labels.

    It means shoppers will not know the true cost of items until they go through the checkout, raising the prospect of disputes and queues as they come to terms with being asked to pay more.

    The frustration will fuel public anger over a rise that was not included in the election manifestos of either the Conservatives or the Lib Dems and which comes after many households have been hit by small or non-existent pay rises.

    The increase is also bad news for retailers whose sales in the run-up to Christmas were devastated by the extreme weather.

    Shoppers could be driven away from making major purchases with the result that retail sales may be down by as much as £2.2billion in the first three months of 2011, according to a report from shopping comparison website Kelkoo and the Centre for Retail Research.

    Such is the concern that the British Fashion Council made a last-ditch plea for the rise to be delayed for 30 days to ensure those who were unable to shop before the January 4 deadline are not penalised.

    And motorists were today joining queues outside petrol stations in a bid to fill up before the VAT hike increased prices even further.

    Prices at the pumps have already jumped this year with a rise in fuel duty on January 1. 

    The TaxPayers Alliance complained that the increase will hit poor families hardest and called for it to be cancelled. However, Chancellor George Osborne has made clear that it will be a permanent fixture of government tax policy.

    Price comparison website uSwitch.com said the VAT rise will add £158 a year to essential bills alone, particularly petrol, food and phone bills.

    Spokesman Ann Robinson said: 'Every household will be affected in one way or another. Cutting back on luxuries is old news – now people need to cut their essentials.'



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