Tories and Labour have boxed themselves in on taxation, claims IFS

Pre-election pledges not to introduce major increases in VAT, national insurance and income tax after the election could cause problems if economy slows down

David Cameron and Ed Miliband have "boxed themselves in" on taxation after a bidding war led Labour and the Tories to rule out major increases in Britain's three main taxes that raise 60% of revenues, the Institute for Fiscal Studies (IFS) has warned. The IFS said that in the event of an economic downturn, Labour and the Tories would find themselves with little room for manoeuvre in the next parliament, after the most significant announcements on tax of the election by the two main parties.

Cameron caused surprise among his ministers - and briefly wrong-footed the Labour leader - when he ruled out an increase in VAT after the next election in the final session of prime minister's questions before the election. Within an hour, Ed Balls had ruled out rises in national insurance and in the basic and higher rates of income tax in an attempt to neutralise claims by the prime minister that Labour was planning to introduce a tax "bombshell" after the election.

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