An incredible thing happened today – VAT decreased by 2.5%. It is an amazing time to live in; I was surprised and/or delighted at the prospect of Mars Bars decreasing in price by two whole pence, and iPod classics dropping by a WILD ten pounds. I mean, that’s exactly how to get strapped-for-cash shoppers back on the high streets and out of their savings-fund hidey holes, right?
Wrong, so unbelievably wrong. What Alistair Darling is doing here seems plausible in theory – get consumers spending more, injecting more money into the economy, in order to make this current recession a shallower, more tolerable one. Of course, many of the ignorant masses are going to see the words “fall” and “tax” and immediately set up extravagant pool parties (I am fully aware it’s the middle of winter) in which they’ll be drinking champagne by the bucket full, or actions approximated, but really, what is there to celebrate? As Shadow Chancellor of the Exchequer, George Osborne delivered the perfect mantra at the mini-Budget – “Tax giveaways for Christmas, paid for by tax rises for life!”
As a matter of opinion, consumer goods have been overpriced for years, the purchase cost far outstripping the manufacturing and transport costs, so how designer jeans dropping by £10 (such as £170 to £160) is a significant change, I don’t know. It is as simple as this – these cuts in VAT will NOT get people shopping again as we have the sense to spend smart. It may well be the festive season, however, I am not going to be reckless with my money, as I can see straight through any change in tax. A cut must be funded somehow, and the money we save now must be paid back anyway. So if I rush out to the shops and spend more than I usually would, just because I can, when the times comes to clean up the mess, I’ll be down more money because I was reckless.
Do Labour not consider the fact that people, contrary to popular belief, have sense?
Has anyone considered the backlash of the amount of money borrowed to fund this tax cut? I think, in fact, Labour have labouriously (look mum, I made a pun) pondered this fact and have decided to implement this following the political cycle; that is, if they do not win the next General Election, it will presumably be the Conservatives who have to mop up their mess.


