Sunday, 23 November 2008

VAT CUT FOR RECOVERY PLAN

This story is taken from the BBC News Website.

A VAT cut could be at the centre of the pre-Budget report on Monday, according to widespread speculation.
Reports suggest that VAT could drop by 2.5% to 15% as part of Alistair Darling's plan to revive the flagging economy.
Meanwhile, Gordon Brown, writing in the News Of The World, has pledged to help struggling families and insisted the government was "on their side".
In the Sunday Mirror, Mr Darling said "every household" would be supported through the "difficult period ahead".

The specifics of Mr Darling's recovery plan will remain under wraps until Monday.
It is understood that, as well as the VAT change, he may also announce further tax cuts targeted at poorer people, as well as big increases in public spending.

Mr Brown writes in the News Of The World: "I know how worried many people are about their jobs, making ends meet at the moment and about the security of their homes.
"No politician can promise to stop the difficult times, but I can promise that we will do everything we can to help people get through them fairly.
"I want every household facing difficulty at this time to know we are ready to help and on their side."

It is thought Mr Darling will say, in the Commons on Monday that his recovery formula, will leave Britain with a £100bn debt, that the country will have to pay back later, in the form of higher taxes. Alistair Darling's other measures expected in the package are, help for people in mortgage arrears and loans for small businesses.

Tory leader David Cameron has opposed the plan, accusing the prime minister of planning to "throw money at the crisis in the faint hope that this will help recovery".
But Mr Brown says failure to intervene will only prolong the pain of recession.
"If we do not act now, the downturn will be longer and more severe,".
"A prolonged recession means people out of work for longer, more repossessions, and businesses taking longer to start growing again."
Mr Brown also hints further government efficiency savings will be announced in the pre-Budget report.

Mr Darling says in the Sunday Mirror that "every household" will get support to help them through the "difficult period ahead".

An ICM poll for the Sunday Mirror shows the Conservatives have maintained an 11 point lead over Labour.

So, what do you think about this proposed VAT cut? What do you think about all the borrowing being done by the Government? Is it right/wrong? Well, I'm no expert on all of this, but it doesn't take a rocket scientist to work out, that at some point, all this money has got to be paid back. This will mean raising taxes yet again. What do you think?

7 comments:

Gary Elsby said...

To do nothing is fatal and to do something is compulsory.
Nobody id kidding me that the bankers and the monetary policy committee (MPC) didn't see this coming, as all business have been saying this for years, S-o-T in particulary have been shouting the loudest and longest.

The system is at crash stage and business is falling rapidly and has spread to the basic consumer/spender and so confidence has to be brought back.This where I disagree with Shaun Bennet.

It was the Tories who shoved up VAT from 15% to 17.5% to fill their own black holes. (Cameron was advisor to Lamont at that time and can be seen during the 'green shoots' speech).

Everything Darling announces today can fail drastically BUT evry other Country is doing similar (approx 2% of GDP). This means that China will not benefit from new found wealth by Britons buying cheap foreign imports.

A VAT drop will drop almost everything including petrol and the end consumer will pay less for almost everything.That has to be good for the hard up public.

Who will pay it back? This is the interesting bit but Labour has always stuck to its promise for no tax increase on PAYE (a scam is NI which went up 10% to pay for hospitals and is ring fenced. Ignore those that say it only went up 1%). My guess is that we will all pay it back but the rich will pay it back more and not just pro rata in 2011.

A bit after the next GE. Timely.

warren said...

So again it open wide as more New Labour spin gets thowen at us. I'v admited before that this is not my strong subject, but even I can see that a 2.5% reduction in VAT and taxing high ereners a bit more is not the way to get out of the situation we find at the moment.
What Darling needed to do was to find some way of putting more money into the pay packetts of working men and women week after week.Gary, belive me when I say mate, the lowering of VAT will indeed not be passed on to these folk, it would cost the large supermarketts to much in man power and money to do so, all of them will just say thanks very much and take the reduction fore themselfs, in even more proffit. Then the bosses will hide in the meating rooms and officers and let the workers on the tills and shop floor get the stick from customers insisting prices must come down becouse the good, but indeed not very bright Mr. Darling says so.
A better idea would have been to drive the price of petrel down even lower by removeing some of the duty payed on that, or/and indeed lowering the cost of energy by removeing VAT on that, but ofcourse that makes to much sence.
In fact lowering VAT may even put smaller companeys to even more expence by forceing them to produse new price lists and caterlogs.
Evrything on a shoping list may not in fact be coverd by VAT. If the reduction is passed on, we would see the cost of a jar of Coffie come down by a few pennys but the price of Tea, that we have never payed VAT on would stay the same. The same with biscetts and cake, biscetts are covered by VAT, so would come down in price( well about 1/2p), cakes, belive it or not, as long as they have not got chocolete in them ar'nt covered and would stay the same. Its all very silly rearly, its a mine field and the normal workers are bound to get a rousting over it, becouse they always do.
As for the more tax payed by folks on a good whack, think about this one, these are the very one that employ folks, and have the money to buss off to another country if they think they are getting cained in taxes hear, takeing them jobs with them. need I say more, this New Labour lot might just sink this ol' place yet.

Gary Elsby said...

Warren, I luv your spelling.
the alternative to Labour's giveaway rescue plan in the Tory plan.
What I heard made me laugh.
A VAT holiday for business and a NI reduction if employers employ.
Unworkable.
No work= no need to employ and a VAT holiday means delayed financial hardship.Fact.

There is no other solution other than to comprehensively attack the problem from all fronts and across the world in unison. This is a Labour idea and plan.

Gordon Brown is having a birthday and yes, we all know that somehow it will be paid back but to do nothing is negligent and Labour doesn't do negligence on Health, Education, Poverty, Children or the poor.
That is why Labour now run this Country and the Conservatives are dead and buried.
Where on earth did the BNP come from?

bnp and proud said...

It's all the Asian immigrants fault. Kick them out and watch Britain prosper.

warren said...

Gary, look dont worry about the spelling, or them lot in the BNP, they have less of a idea them me on this one. Like I say, Mr. Darling needed to put money in the Joe Blogses ass pockett, and these plans fail to do this, only a cut in the income tax that we pay and a reduction in NI would do this. A 2.5% reduction on the rate of VAT will not help at all. Infact a highering in the duty on drink and fags may go some way to help the NHS, not only with money but indeed stoping silly folk get themselfs into a state health wise to.
If he wanted to lower something, VAT on heating bill going lower would have been a better option to go for, that would have gone some way to prove that the govenment care about a growing problem in this country, and would have given the OAPs more heating over the winter. Like I say I would be sruprised if we see any beniffits from a lowering of VAT, its not cost efactive to the retailers. You are not going to go out and say 'I think I will get that new car afterall, now VATs come down, it will be £250 cheeper.'
Its all spin, its the same old shit, no matter which one of the main partys are smashing it round, becouse its all the bloody same and as been for years. No matter witch ones in power. I say it again, the Labour movement passed away with John Smith, after that point, when this set of fools we have now took over true Labour was lost to us.

Debbie said...

Gary Elsby

I thought glue sniffing had gone in the eigthies along with Arthur Scargill and punk rock. If it is not glue you must be on some other hallucinatory drug.

Lets look at the Labour plan.

1 Give Billions to the Banks who are in the poo but then still not be able to make them lend.

2 Take 2.5 percent off VAT that will mean a pint of Fosters in Weathers will cost 97.5p - big diffence this could insentivise me to buy more. Much much less than given to the banks.

3 Put up everybodys NI an across the board tax that will effect the poorest families most. (as a portion of their income)

4 ALL financial experts agree that the UK recession will be the deepest and will last the longest. - remind me Gary who has been ruining sorry running this country for ten years. The government has shown that it is more concerned with bailing out the banks and its friends in the city that protecting the poor families or stimulating the general UK economy.

Now Your comments:

5 Labour doesnt do negligence on the poor - visit the City General or North Staffs they are decrepit. The health service in this country is not much better than that of some third world countries.

6 Labour does not do negligence on the poor -
a. The gap in life expectancy in the UK between the richest 1 percent and the poorest 1 percent is greater now than in Victorian times (Google it)
b. There are 900,000 more people living in poverty than there were in 1997. (Govt own figures on THEIR defintion of poverty.

7 Labour run the country but remember Brown bottled it when he wanted to have an election he was shit scared of losing. The BNP get elected because voters are sick of labour running this city and others in the North West.

Finally an example,
(one of many - it does not take the brains of an Archbishop to think of others)
of a targeted stimulus would have been to give all families with a total income of less than £20k vouchers which could have only been spent in UK shops.

A little balance next time Gary or fewer hallucinogens.

warren said...

Nice post Debbie but you got one thing a little mixed up. Don't all you old drunks out there think the price of the booze is on its way down, it is'nt, Darling may be daft but not that daft. More duty will be slaped on the price of booze, fags and petral to ofset the lowering of VAT on them. Whilst I agree with this move on the beer and the cigs, only a fool would not, I think the duty on fuel sould have been left.
Anyway, it was May 1997 that New Labour came to power, by me reconing its not 10 years since they have been killing the UK, its 11 and a half, and who the hell said Punk was dead.