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UK VAT rise ‘necessary’ to boost jobs and confidence

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UK Chancellor of the Exchequer George Osborne said yesterday's VAT increase, as well as other measures to narrow the budget deficit, will boost employment.

The VAT measures will increase employment because they will instil confidence” and Britain is “on top of” its deficit reduction plan, Mr Osborne told BBC Radio 4's ‘Today’ programme.

The Conservative-led coalition argues that the rise in VAT to 20pc from 17.5pc is needed to help tackle the nation's record budget deficit, while the opposition Labour Party says it would harm economic growth.

“It is a tough but necessary step,”MrOsborne said.