The UK's Labour Party has definitively stated that it will not increase the value-added tax (VAT) if it wins the upcoming election on July 4, according to its finance

spokesperson, Rachel Reeves. This clarification comes in response to comments from Conservative finance minister Jeremy Hunt, who claimed that Labour had not explicitly ruled out a VAT increase.

In an article for Thursday's Daily Telegraph, Hunt asserted that the Conservatives would not raise VAT during the next five-year parliamentary term if they remained in power and criticized Labour for not making the same commitment.

"This is absolute nonsense. Labour will not be increasing income tax, national insurance, or VAT," Reeves responded, positioning herself as a prospective replacement for Hunt as finance minister.

Currently, VAT is set at 20% on most goods and services in the UK, making it the government's second largest source of tax revenue after income tax. In the fiscal year ending in April, VAT raised £198 billion ($252 billion).

In a Tuesday interview with Sky News, Reeves reaffirmed that a Labour government would not raise income tax or national insurance during the next parliamentary term. However, she did not make an equally firm commitment regarding VAT, stating that Labour has "no plans for increased taxes" beyond minor adjustments already proposed, such as applying VAT to private school fees.

Last week, the Institute for Fiscal Studies cautioned that regardless of which party wins the election, meeting current budget rules would be challenging without either raising taxes or reducing the scope or quality of public services.

Government budget forecasts from March indicate that the tax share of national income is set to reach its highest level since 1948 this financial year, partly due to income tax thresholds not keeping pace with inflation. Photo by Rwendland, Wikimedia commons.