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  PaulB 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.

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