A ceasefire in the VAT war?

Has another dividing line faded into the sand?  It sure looks like it, going off this Times report on how both Labour and the Tories are considering hiking VAT to 20 percent.  If you recall, it was thought that Brown blocked Alistair Darling’s plan to introduce the rise in last year’s Pre-Budget Report – and all so he could attack the Tories over reports that they would do similar.  The PM will find it a lot harder to stage that attack after this morning.

A few weeks ago, the rumour was that Labour would make keeping VAT at 17.5 percent a “main election pledge”.  Whether that pledge now appears, or not, will say a lot about the shifting balance of power between Brown and his Chancellor.