The signs are that a fourth term Labour government would be even more fiscally irresponsible

Patrick Hennessy has the scoop in The Sunday Telegraph that Gordon Brown plans to make a pledge not to raise VAT a key dividing line with the Tories at the next election. A senior Labour source tells Patrick that the Brownites rebuffed Treasury effort to raise VAT in the PBR because it “was all about dividing lines for the election. We were determined to be able to pledge that we would hold VAT at 17.5 per cent so we could hammer the Tories over putting it up to 20 per cent.”

One can see the politics behind this, the Tories won’t commit to ruling out an increase in VAT—indeed, I’d be shocked if they didn’t take it to twenty percent in their first Budget—so Labour will claim that while as Labour will place the extra tax burden on the rich the Tories will put it on everyone.