On the day that VAT goes up to 20 % in the UK the clamour from Labour’s leader Ed Miliband bitches that it is the ‘wrong tax at the wrong time’.
That is easy to say and it shows the sound bite spinners are still in the background but remember that Labour was the group who broke their own golden rules for fiscal prudence and maxed out the country’s credit cards when their love affair with the City went belly up. They lived in monetary fantasy land and the nation now has to pick up the tab.
To listen to the complaints about the spending cuts and tax increases, you would think the government was trying to pay off the credit cards in short order. Actually they are simply trying to afford the monthly payments without the debt growing too much.
Another snippet to remember is that, according to insider Lord Mandelson, the Labour Chancellor Alistair Darling twice tried to put up VAT when things started going wrong and he was blocked by No 10. Go back to 2008 and we find from the archives of the Daily Mirror that he actually wanted to bring in an increase about now.
At least this is one proposal that the government has delivered on, unpleasant as it is. Other proposed measures have ended up watered down after protests so amplified by the media.
Perhaps they could have looked further back in history to note that for quite a long time we actually had two concurrent rates of VAT – the higher one of 25% being on luxury items. It might have had a bigger impact if they had gone for the flat screen TVs, the games consoles and all the other imported paraphelia that people seem to find so desirable, if not essential, but couldn’t really complain about a price increase for.