George Osborne’s avoidable VAT rise
In his Budget speech, George Osborne repeatedly said that this was the “unavoidable Budget”. Even within his self-imposed framework of £1 of net tax rises for every £4 of spending cuts – which flies in the face of all international comparisons – the VAT rise was only necessary to pay for a series of tax cuts elsewhere.
The regressive increase of VAT from 17.5 per cent to 20 per cent raises £13.5 billion by 2014-15. But cuts to income tax, national insurance, corporation tax, and council tax cost £12.4 billion. Once all the changes are taken into consideration, tax changes contribute only £8.2 billion to the fiscal consolidation.
By contrast, the reduction in total managed expenditure comes in at £31.9 billion with £20.9 billion coming from departments and £11.0 billion coming from changes to benefits such as the freeze on child benefit. Indeed, effective cuts to child benefit, the child tax credit, and child trust funds – which together cost £2.5 billion – could have been avoided if the Chancellor had not announced cuts to corporation tax.
George Osborne’s VAT rise was “avoidable”. The reason it has taken place is it pay for the Lib-Con’s ideological tax cuts, which fly in the face of fiscal responsibility.
UPDATE 17.44:
For somewhat different reasons, Conservative Home have come to the same conclusion about VAT. Tim Montgomerie’s piece also includes this line from David Cameron in an interview with Sky on April 1st: “Our plans don’t involve an increase in VAT”.
Labour List have a separate transcript of David Cameron saying the same thing after the election in mid-May. Next Left call this Conservative move, “the legendary Geoffrey Howe dodge on VAT”.
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http://twitter.com/houseoftwits/status/16772218459 House Of Twits
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http://twitter.com/thabisnit/status/16772233211 Martin Binfield
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http://twitter.com/bangorunilabour/status/16773581217 Bangor Uni Labour
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http://twitter.com/bangorunilabour/status/16773639117 Bangor Uni Labour
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http://twitter.com/dealam/status/16773859526 Lamlamlamlamlamyaaaa
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http://twitter.com/switchday/status/16774005808 Pranev Sharma
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http://twitter.com/switchday/status/16774119934 Pranev Sharma
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Mr. Sensible
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Paula Sharratt
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Mr. Sensible
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http://twitter.com/petergcampbell/status/16779048534 Peter Campbell
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http://twitter.com/hitchineng/status/16781543861 Hitchin England
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http://bestblogs.labourhome.org/2010/06/22/george-osborne%e2%80%99s-avoidable-vat-rise/ George Osborne’s avoidable VAT rise « The best Labour blogs
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http://Charliechops1 John Martin
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http://twitter.com/georgeeaton/status/16783854787 George Eaton
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http://billyblofeld.wordpress.com Billy Blofeld
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Jacquie Martin
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http://twitter.com/jillhs23/status/16787903029 Jill
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http://twitter.com/richard28wood/status/16789056923 Richard Wood
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http://twitter.com/tommilleruk/status/16789301029 Tom Miller
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http://www.labourmatters.com/ Labour Matters
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http://twitter.com/liberationlover/status/16790904763 Annie B
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http://twitter.com/sspcampsie/status/16791064940 Neil Scott
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mike
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mike
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http://athousandcuts.wordpress.com/2010/06/23/daily-cuts-briefing-%e2%80%93-wednesday-23rd-june/ Daily Cuts Briefing – Wednesday 23rd June « A Thousand Cuts
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http://theuntoldstories.com/main/?p=4831 "George Osborne’s avoidable VAT rise" and related posts | www.TheUntoldStories.com
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http://twitter.com/dannycarrington/status/16864613218 Danny
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http://twitter.com/jooldale/status/16877833125 jo
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http://twitter.com/juderobinson/status/16914497829 Juderobinson
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http://twitter.com/michaelsparling/status/16915772271 MICHAEL SPARLING
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http://www.leftfootforward.org/2010/08/more-woe-for-clegg-as-ed-miliband-slams-coalitions-100-day-record/ More woe for Clegg as Ed Miliband slams Coalition’s 100-day record | Left Foot Forward
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http://www.leftfootforward.org/2011/02/tackling-child-poverty-wales/ Tackling the scourge of child poverty in Wales | Left Foot Forward
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