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Osborne Defends VAT Increase as Opponents See Damage

Chancellor of the Exchequer George Osborne defended an increase in value-added tax that took effect today as necessary to tackle the U.K.’s record budget deficit, as his opponents warned it would hamper economic growth.

“Once we had decided that at least part of dealing with the deficit had to come from a tax rise, it struck us that VAT was the least damaging tax rise,” Osborne told BBC Radio 4’s “Today” program. “The main alternatives would be a rise in income tax or a rise in national insurance, and we thought that both of those would be far more economically damaging and therefore to be avoided.”