Libdem Turkeys vote for a VAT Christmas!
- 23 June 2010 06:2057627Ramblings about The Budget...
As we know the Conservatives have a near fatal attraction to VAT. Show them the key to Downing St and as sure as eggs is eggs, the VAT will skyrocket. So it wasnt any real surprise that the VAT was scorched up to 20% yesterday. VAT is an unpopular tax because it hits people right across the board on almost all goods, and the poorer you are the higher percentage of your income it absorbs and steals away. There's nothing sophisticated about VAT - Its the scattergun effect in action.
This was a very severe budget all round but despite George Osbornes particular positioning in the state of the economic nation, a view not shared by all as we know, his budget didnt resonate too dramatically or positively with the financial markets as they more or less stayed exactly as they were..without even a trace of a moderately lukewarm flurry.
Nothing went on beer and fags in this budget, unusual, but if he already has your gooleys in the palm of his hand due to the blanket VAT, then he didnt need to do anything there, so dont see it as a plus point.
However in fairness there was one excellent plus point in his raising of the tax threshold. This means you are allowed to earn more before the TaxMan comes knocking on your door. This gives the poorer working families quite a good boost...in that some very poor workers will be out of the tax bracket altogether. Good news for those with a social conscience.
Labour Leader Harriet Harman was in fine form yesterday in her response...and she saved the real venom for the turncoat Libdems who once again sat amongst the Tories like nodding dogs...baying yes to every Tory policy shift. These Libdem guys had campaigned vigourously against VAT just a few short weeks ago and here they were whimpering and simpering before the British public in later interviews, with a squirm factor the like of which hasnt been seen before. They know they have shafted their voters. You can see it in their eyes. As Ms Harman said....they have abandoned their principles, and their voters, so that they can ride ride around in ministerial cars.
They are finished as an outfit...the turkeys voted for Christmas!
The picture shows Chancellor George Osborne..with Libdems to the right of him, Libdems to the left of him.email: dover7@msn.com - 23 June 2010 06:3157628Some interesting facts..only one (1) Lib/Dem waved his order papers in support of the budget at the end of George Osbornes deliberations!!The rest just sat there with sullen faces.
Pre election photos showed Clegg stood in front of their party banner "No rise in VAT" ....erm should have read "unless bribed by the offer of power"
It also clearly demonstrated that the real 'Deputy Leader' or Number 2 at Drowning St is Osborne not Clegg.
Simon Hughes also employed a wonderful euphemism when asked about the Lib Dems opposing a VAT increase during the election campaign. He said the Lib Dems had never actually ruled the measure out. "It was a less preferred option," he saidMarek
I think therefore I am (not a Tory supporter) - 23 June 2010 07:4357632PaulB really. The Conservatives are dealing with the terrible Labour legacy. Forget all the complete bull**** being said by Labour apologists and look at what key groups like the IFS say. The structural deficit is worse than Labour claimed and was set to get worse under their plans placing our credit rating at risk.
Market response has been positive as a matter of fact. Expectation is that interest rates will now be kept lower than otherwise they might, hence a slight weakening of the £ - yes that is a very positive sign. Equity markets had already counted in a tough budget and the all important gilt market has strengthened.
If you are forced to increase taxes then VAT is a good one to raise for a number of reasons:
1/ The elderly and poor spend a higher proportion of their income on food and housing, both zero rated and power with a lower VAT rate.
2/ It is cheap and easy to collect with the big spenders paying more (natutrally these will be people with the most disposable income). A lot of the VAT take is optional rather than essential spending.
3/ Unlike income tax it does not disincentivise work.
The fact is that the Conservatives want a smaller state with lower taxes overall but must deal with the situation that exists and not the fantasy economy that drove the Labour years into bust.
As for the LibDems - I did not expect them to be exactly happy and no Conservative will be happy about any tax rises. But they must and I am sure will be, realistic.
The world is different now and is set to change more.
Get used to it - the days of a bloated fat state living on tick are over. The State is set to shrink and to play a lot smaller role in our lives and so it should. - 23 June 2010 08:0557637Im still not sure why the Labour proposed National Insurance rise was a worse scenario than a VAT rise. NI is paid by those earning over £20,000 per year so the poorer workers escape completely. I heard Alastair Darling saying this a short time ago on Radio4 Today Programme...he also pointed out the massively obvious one.. that pensioners dont pay this tax at all . So a very fair way of doing it, of raising income in austere times.
With VAT, pensioners and the poor all pay it across the board..everyone pays.
Yet Conservative backing business leaders were against this NI rise preferring to tax pensioners instead, and those arguing against NI were saying it was a tax on jobs. Its no more a tax on jobs than VAT is. A VAT rise will curtail growth as experts pointed out late yesterday...therefore it is also a tax on jobs.email: dover7@msn.com - 23 June 2010 08:2757645PaulB - VAT is not a tax on jobs and it raises a lot more dosh, more cheaply, than the NI rise.
National Insurance is a huge on-cost and disincentive to employ people.
Labour do love taxing people's jobs.... They want higher NI at the last election and their previous government in the 1970's had SET as well. Remember that?
You might also ask why every single Labour government we have had ends up leaving office with unemployment higher than when it started. No exceptions. - 23 June 2010 09:1757650whatever one thinks of the budget, i did not see anything likely to stimulate growth.
to cut the deficit there has to be sustained growth as well as tax rises and spending cuts.
one other point why did they raise capital gains tax for some when all the evidence shows that cutting it gives a higher tax take. - 23 June 2010 10:3757662You've got to laugh, else go completely mad. How is it that even now, yes, even now, some still don't recognise the parlous state this country is in? How amazing is that?
Just for the record, VAT in England has traditionally been amonst the lowest in the EU. In fact, when our VAT rate was 8%, in Belgium it was 23%, and that was some 15+ years ago. So, even now, with the rise of another 2.5% we are still behind our friends across the watery divide.
The alleged tax on pensioners is emotive babble with no substance. VAT is only paid when you spend money on items that attract the tax. Pensioners tend not to throw money around on luxuries so this increase will have only minimal impact on those with enough disposable income, i.e. those who can afford to pay the increase.
Harriet did well in her Budget speech response, agreed. She so far, she has shown more balls than Ed or the Millisecond Brothers. In fact, looking at the Labour Front Bench yesterday reminded me of the films of the Nuremburg Trials. There they all sat, guilty of wrecking the economy and yet thinking they've done nothing wrong.
Thankfully the world, or in this case, UK Plc has moved on. - 23 June 2010 10:4157663Howard - there was a great deal for growth....
Cutting the deficit alone keeps interest rates lower than they would otherwise be keeping costs lower for business. Essential for economic recovery. Not to have done so would have seriously damaged the economy. Regardless of political claims, not dealing with the deficit would have been far more damaging.
N.I. concessions to start up businesses in selected areas where public sector cuts will hit worse
Reduced Corporation Tax rates
An increase from £2m to £5m in entrepeneur relief from CGT
The CGT higher rate has been set at the optimum level at which revenue will be maximised without damaging investment.
Other moves to reduce beaurocracy and red tape on businesses will further help.
In my blog there is a chart that demonstrates the impact of the fiscal tightening and, after an initial slowdown, an increase rate of growth. - 23 June 2010 11:3957683I'm afraid Sid is right; the economy was being deliberately mismanaged by a cynical Labour machine that was promising funds that weren't available to projects such as Forgemasters in Sheffield until the very day of the election itself......I'm stunned that power could have been abused in such a way, and to point the finger at George Osborne, who's only been Chancellor for seven weeks, is unbelievable. Without the measures taken yesterday, it's no exaggeration to say that Great Britain would have very soon been witnessing the same scenes as Athens a few weeks ago.
Great Britain is skint, end of. For it to improve, spending has to be cut and taxes have to rise, there is no soft option. And don't blame the coalition for it, it's Labour who've left us like this.True friends stab you in the front. - 25 June 2010 07:5357850Well the BBC's Question Time was squirm inducing last night...not only for the viewer but particularly so for Uncle Vince..yes Vince Cable, the one time darling of the armchair masses who gave his most uncomfortable performance ever. Why you ask? Well here we have on national TV, the Libdems, who have u-turned dramatically on almost everything they campaigned for in the election. They thought the Private Schools idea was bad yet here they are selling it, they campaigned vigourously against VAT as an unfair tax and here they are selling it...one could go on.
What is particularly sad is that I, for a short time during the debates, believed in Nick Clegg when he promised you and me "a new kind of politics!"
I note their well-rehearsed PR spin line, as spouted by one time Uncle Vince, as spouted by the tall redhead guy, as spouted by Nick Clegg himself...is that their stance all changed due to the crises in Greece. Hows that for a baloney leg pull if you ever heard it..strewth!
What disturbed me personally was that I agreed with that right wing geezer from the Daily Mail, Peter Hitchen, on almost everything he said last night. He was a panellist. Me as an oul left leaning citizen of old will have to now go for deep rooted analysis. but gawd yes Hitchen made sense on all the issues. Have I shifted further right than the Daily Mail? Gadzooks!
Roughly and quickly these are the Libdem chokers...
The Private Schools idea being foistered on us by that mad guy, isnt he mad or is it just me seeing it, yes mad Michael Gove who holds up the Swedish Model as a blueprint for good on this one, yet nobody wants this blueprint, even in Sweden. The Tories have stopped quoting Sweden as a blueprint example because they themselves found out, upon further investigation, that it isnt all that good after all. The Tories have stopped quoting the Swedish example. The problem: it takes money out of the existing school system so that the few upper middle class well funded kids can get better educated, at the expense of all the great talented kids out there. Peter Hitchen agrees that this whole idea is a bad idea.
The War: Hitchen also agrees that the war in Afghanistan is a complete nonsense believed in by nobody anymore. Obviously the sacking of General McChrystal came up on the programme and once again, as I said on that other thread on McChrystal...McChrystal merely voiced what we all feel, that it was now become a pointless exercise, which is resulting in an unacceptable daily death toll. The reason suggested by our politicians as to why we are there varies with the prevailing wind.
The VAT...watch the Libdems squirm on this one. Almost everybody agrees this is an unfair tax and that it was an unfair Budget, apart from the few. Even the Institute of Fiscal Studies has described the fair notion as "debatable" at best and "completely unfair" at worst. The Libdems now see this VAT as fair because of the...yes youve guessed it, the Greek factor! Beam me up Scotchie!email: dover7@msn.com - 25 June 2010 08:1257853Well it could all come to a stop if we came out of the E.U. there would not have been a need for a Budget and you all could stop work at 65years old like our own MPs and they go onto a pension just after their first four years in office just look how much our ex MP is geting now a one off payment of over £100.000+ his pension+his old age pension+his job pension before he was a MP,but you voted in the same old way so you all must be happy with it all, will you get a pension after just four years. All they do is look after themselfs always been that way and always will,unless we the voters change it all and we can by the way we vote next time round which will not be long.
- Brian Dixon
- Location: Dover
- Registered: 23 Sep 2008
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25 June 2010 08:1857854vic,i thought you had retired from politics. - 25 June 2010 08:2657856I have but not from living,and I will be still saying what I think is right you do not get rid of me just yet.
- 25 June 2010 08:4957862I agree Paul, that Gove character is very scary. I wouldn't want him as a son-in-law that's for sure. What really worries me is I actually think the guy is a total buffoon, worse than lovable Boris even.
As for agreeing with Mr Hitchen, you should be very worried, as a Thatcherite even I find him hard to agree with!
- 25 June 2010 17:1957915I have completely the opposite view of Gove, a very clever and intelligent man. The free schools is a great policy and will significantly improve education.
As for VAT. It is much fairer and better to tax spending instead of income, specially as the poorest spend a higher proportion of their income on zero or low rated goods. - 25 June 2010 18:4757936have seen gove many times in the past on discussion programmes and comes across as an original thinker, not full of the usual platitudes and party prejuduces and dogma, however the free schools idea is a recipe for social breakdown.
the better off and well educated will know how to corner the dosh and attract better teachers at the expense of the poorer and less well educated.
could end up as educational apartheid. - 25 June 2010 19:0957943I think this is all going to end soon and in a mess.Already we see alot of Leb/Dems saying we are giving in to the blues so it is still all to play for over the remaining part of the year and we might just see the return of old Vic Matcham on the stage again.
SMILEY: 
- 25 June 2010 20:2057958In your dreams Vic, and only in your dreams. As I said elsewhere, despite the parlous state of the economy (thanks Labour) the feel-good factor is on its way.
- 25 June 2010 20:3457963How can you say that after the change,s we have just seen.
- 25 June 2010 20:5357971Vic, if those "changes" refer to England football and cricket teams, who are now quite successful, it is very easy to say.
