Alistair Darling denies VAT lost Labour the election

Alistair Darling today hit back at Ed Balls over claims that Labour could have won the election if it had ruled out VAT hikes for a Parliament.

In the first public hint of Cabinet tensions during the election campaign, Mr Balls revealed that he had lobbied Gordon Brown to make a manifesto pledge capping the tax.

But Mr Balls said that "others disagreed" — code for Mr Darling vetoing the idea — on the grounds that the Treasury always had to keep its options open on tax and spending.

Today, Mr Darling countered that Labour's manifesto policy on VAT was the same as it had been since 1997. He said pointedly that Mr Balls had backed the policy.