Lots of media talk backed by Institute Fiscal Studies that a 20% vat is coming

[Dave the OAP]

4. Successfully achieved the goal of becoming prime minister without going through the inconvenience of being elected by the people. This in spite of the fact that New Labour gained their substantial commons majority with 57% of the voters supporting another party. So much for the benefits of our First Past The Post electoral system.
.

Humour an old man. At what point in our electoral system do we "elect" a Prime Minister?

Where on my ballot paper did it say: " Put a cross here who you want to be Prime Minister"

In all the 40 odd years I have been voting I must have missed that box.

I assumed we were voting for a party and whichever party won the election, the leader of that party would become Prime Minister. Is that not how it works?

 

[Hatterlovesbrighton]

9th August 2009
20 percent Vat is likely whoever wins the next election | The Spectator

It was in the public domain long before the last election was even called.

I can't see why they are getting grief for this when they were not the ones who got us into this mess in the first place, had Labour been more financially responsible,then there would have been no need for this increase.

And I can't believe that they are getting it in the neck for something they haven't yet done, or even hinted at. The IFS thing was a survey of economists and what they would do.

 

[ROSM]

shh Granny - you're not allowed to point out details like that. Just repeat after me 'Gordon Brown was a nasty man who stole the Prime Ministership and refused to leave Downing Street immediately when the nice David Cameron also failed to win the election'.

When you get word perfect you'll be able to present on Sky news with Kay Burley

 

[simmo]

I wish you'd stop posting sense !!

But it's not is it.

Labour were planning the 20% VAT tax rise in any case, none of the parties ruled it out.

It is Labour's financial crisis, because of these reasons. The banking crisis in Oct 2008, was I agree a global phenomenon and it started the global financial crisis that we see, but various countries economic position and management up to that point and after have lead to how they have gone through it and how they stand now. Countries whose economy were run better than ours say for example Germany or Australia sit in a stronger position than others that weren't, i.e Greece, Iceland. We though sit somewhere much closer to Iceland or Greece than the good end.

We are not in the worst position but we are in deep, deep trouble and it is not the bailing out of the banks that have caused this it is because when times were good in 2007 for example Labour still spent more than they brought in tax revenues, now after the banking crisis (the bailout of which is minimal compared to the overspend by Labour) Labour still kept spending/spending/spending at the same rate eventhough the tax revenues from businesses/workers they were getting in was less and less due to the ensuing recession. Therefore the defecit spiralled up and up and up.

We now sit £166BM in debt. I remember about 15 years ago everyone was going nuts about us being £50BN in debt. This is by far the worst position we have been in actual or real terms ever in peace or in war time. Labour have done what they always do when they get into power. We are broke without a pot to piss in and it is probably only our good name down the centuries of being financially sound and willing to pay our debts that have stopped a Greece-like situation happening to us. Let's hope the Cons can get us out of this hole, like they always seem to have to after Labour's been in charge.

 

[beorhthelm]

i really dont get the problem, espeacially from the left wingers. its a discrenary tax, as long as they dont put it on food (which would be political suicide), you will barely notice it. 2.5 % more would be 5p extra a pint, £1 extra for a pair of jeans, £15 on £600 TV. it funny because people talk about how we must consume less or need to pay a fuller price to reflect the envirnomental costs of material goods, but then when a tax might actually do this everyone crys about it.

or put another way, would you rather keep VAT at 17.5% or keep income tax allowance at current rate. Conservatives where very careful to avoid saying much either way on VAT, leaving it as not ruled out, wait and see. Anyway this is not something that is about to happen, its an opinion not a policy. i doubt it will happen soon.

A 20% VAT rate would mean if you did £69,000 of Sales per year then you'd charge £69,000, but if you did £70,000 of Sales you'd need to charge 20% VAT so, potentially £84,000. This is equivalent to putting your prices up overnight by almost 22%!

its a 2.5% rise. i think you are driving at a non-VAT registerd business being put over the threashold, but if they are forced to register they would then be able to claim all VAT back anyway. or something, it certainly doesnt make alot of sence that a 2.5% incraese translates to a 22% for anyone.

 

[Pavilionaire]

It would be ironic if the 20% VAT rate came in because the problems it would give most small businesses would dwarf that of the extra costs associated with Labour's "jobs tax" 1% Employer's NI rise that Cameron slagged off so vehemently.

 

[HH Brighton]

Was obvious the tories would raise VAT but by far the most under hand thing there doing is not scrapping the national insurance rise for employees only for employers.....shameful.

 

[Eastleigh Seagull]

Humour an old man. At what point in our electoral system do we "elect" a Prime Minister?

Where on my ballot paper did it say: " Put a cross here who you want to be Prime Minister"

In all the 40 odd years I have been voting I must have missed that box.

I assumed we were voting for a party and whichever party won the election, the leader of that party would become Prime Minister. Is that not how it works?

No - you vote for the individual to represent you at Westminster - not for the party - hence the reason why people like Quentin Davies are able to change parties and not have to put themselves up for election.

The reality is of course - even more so now with the debates - that the vast majority of people are voting for who they want to be PM/

 

[ROSM]

I think you're misreading what I wrote - but out of courtesy I'll try and respond (despite doing tis around my job) by referring to your comments rather than an out of context precis of them

But it's not is it.

Labour were planning the 20% VAT tax rise in any case, none of the parties ruled it out.

Senior tories did rule it out - but as has been mentioned here, it's only an ifs survey so it may not happen and as I said the key word is Immediately

It is Labour's financial crisis, because of these reasons. The banking crisis in Oct 2008, was I agree a global phenomenon and it started the global financial crisis that we see,

it actually started in the US with toxic loans and subprime debt

but various countries economic position and management up to that point and after have lead to how they have gone through it and how they stand now. Countries whose economy were run better than ours say for example Germany or Australia sit in a stronger position than others that weren't, i.e Greece, Iceland. We though sit somewhere much closer to Iceland or Greece than the good end.

what links the economies are those than were reliant on service and financial industries and those who have a greater mix of manufacturing or natural resource industry - our manufacturing and 'industry' market was heavily damaged in the 1980's and early 90's and the move to a financial industry led market was commenced at that time- despite investments in those areas by the major administration and during the labour government we have never recovered that position so any 'banking industry' led crisis would have hit us more that others. You can question a number of reasons for this, the use of north sea oil etc, selling gold etc but the issues we now face had roots in decisions taken by a number of previous administrations stretching back to Edward Heath

We are not in the worst position but we are in deep, deep trouble and it is not the bailing out of the banks that have caused this it is because when times were good in 2007 for example Labour still spent more than they brought in tax revenues, now after the banking crisis (the bailout of which is minimal compared to the overspend by Labour) Labour still kept spending/spending/spending at the same rate eventhough the tax revenues from businesses/workers they were getting in was less and less due to the ensuing recession. Therefore the defecit spiralled up and up and up.

I think that's a bit simplistic and doesn'tr match by recollection of the numbers, when I'm not at work I'll do my research

We now sit £166BM in debt. I remember about 15 years ago everyone was going nuts about us being £50BN in debt. This is by far the worst position we have been in actual or real terms ever in peace or in war time. Labour have done what they always do when they get into power. We are broke without a pot to piss in and it is probably only our good name down the centuries of being financially sound and willing to pay our debts that have stopped a Greece-like situation happening to us. Let's hope the Cons can get us out of this hole, like they always seem to have to after Labour's been in charge.
as I said earlier, a number of ecomomists had viewed the budget statement by Alistair Darling and in the labour manifesto and they advise that the numbers added up and would have led to a halving of the deficit within 8 years - we'll see how quickly this is achieved now and whether the earlier and deeper cuts have the desired effect and are worth it

 

[Billy the Fish]

The reality is of course - even more so now with the debates - that the vast majority of people are voting for who they want to be PM/

Indeed. In my situation I'm voting for a tory seat in the house of commons and david cameron as the Prime Minister. If I was just voting for fatty soames then I wouldn't bother because by all account he's a shit MP and a bit of a knob.

 

[Guy Fawkes]

i really dont get the problem, espeacially from the left wingers. its a discrenary tax, as long as they dont put it on food (which would be political suicide), you will barely notice it. 2.5 % more would be 5p extra a pint, £1 extra for a pair of jeans, £15 on £600 TV. it funny because people talk about how we must consume less or need to pay a fuller price to reflect the envirnomental costs of material goods, but then when a tax might actually do this everyone crys about it.

Maybe thats what they need to do if they ever introduce this - pass it off as a green tax, basically, by not agreeing to pay this extra money, the world will heat up and all the cute little animals will die making you an uncaring B@stard so hand your cash over now.

 

[The Large One]

Pedant alert...

Increasing VAT from 17.5% to 20% would represent a 2.13% increase, not 2.5%

 

[ROSM]

Maybe thats what they need to do if they ever introduce this - pass it off as a green tax, basically, by not agreeing to pay this extra money, the world will heat up and all the cute little animals will die making you an uncaring B@stard so hand your cash over now.

but this isn't a tax to reduce usage - it's a tax to raise income and an easy one at that as it is simple to collect. A raise to 20% will raise upwards of GBP11bn per year so in the life of a parliaments that's £55bn. I have no issue with paying it personally (although I think there are more deserving areas to tax) but if this will be the approach then why deny it during the election campaign

 

[BensGrandad]

I am fairly sure that I read somewhere that the EU wanted VAT raised in every country, within the EU, to 20% in order to be equal with each other.

 

[simmo]

I think you're misreading what I wrote - but out of courtesy I'll try and respond (despite doing tis around my job) by referring to your comments rather than an out of context precis of them

Senior tories did rule it out - but as has been mentioned here, it's only an ifs survey so it may not happen and as I said the key word is Immediately

Where/when, I have heard loads of politicians Lab/Cons/LD deliberately not ruling it out, because it is pretty obvious that is what is going to happen (for starters).

it actually started in the US with toxic loans and subprime debt

Tell me something I don't know! However, the effect of it has been a global phenomenon because the US toxic bank debts were underwritten by other international global banking institutions.

what links the economies are those than were reliant on service and financial industries and those who have a greater mix of manufacturing or natural resource industry - our manufacturing and 'industry' market was heavily damaged in the 1980's and early 90's and the move to a financial industry led market was commenced at that time- despite investments in those areas by the major administration and during the labour government we have never recovered that position so any 'banking industry' led crisis would have hit us more that others. You can question a number of reasons for this, the use of north sea oil etc, selling gold etc but the issues we now face had roots in decisions taken by a number of previous administrations stretching back to Edward Heath

Go on I can feel it, just say it.... you want to blame Thatcher don't you. Go on just say it. Eventhough Labour have been in charge 13 years and could have changed everything. If they wanted to the very nature of the UK economy by moving away from the banking/service sector (yes the banking sector which of course Labour postively encouraged and loosened the regulating rules) towards any type of economy (e.g manufacturing) they chose....but they didn't.

I think that's a bit simplistic and doesn'tr match by recollection of the numbers, when I'm not at work I'll do my research

I have heard numerous economists and financial experts say this. It is because of Labour's overspending in good times and in bad, they couldn't even balance the books in the good times and they didn't even attempt to cut spending when tax revenues reduced after autumn 2008 when times were bad. Thus the debt has spiralled. The stats below also would seem to bear this out as debt to GDP was about around 45% in 2006 and 2007, around 52% in 2008 (bank crisis started autumn 2008) and around 68% in 2009. The fact that our debt was also aorund the 45% mark in 2006/7 also proves that Labour were overspending a lot too when times were good.

National Statistics Online - UK Government Debt & Deficit


as I said earlier, a number of ecomomists had viewed the budget statement by Alistair Darling and in the labour manifesto and they advise that the numbers added up and would have led to a halving of the deficit within 8 years - we'll see how quickly this is achieved now and whether the earlier and deeper cuts have the desired effect and are worth it

Well as it was Alistair Darling and Gordon Brown whom got us into this mess I am just glad someone else is going to try and get us out of it.

 

[The Antikythera Mechanism]

Humour an old man. At what point in our electoral system do we "elect" a Prime Minister?

Where on my ballot paper did it say: " Put a cross here who you want to be Prime Minister"

In all the 40 odd years I have been voting I must have missed that box.

I assumed we were voting for a party and whichever party won the election, the leader of that party would become Prime Minister. Is that not how it works?

He wasn't the leader of the party at previous general elections, and who's to say that, had he been, the results may have been different. Although the PM is not "elected" by the voters, the individual party leaders have a major influence on where the electorate mark their X. GB became PM without being the leader at the time of an election.

 

[beorhthelm]

I am fairly sure that I read somewhere that the EU wanted VAT raised in every country, within the EU, to 20% in order to be equal with each other.

yes. it greatly annoys them we have 0% rated food and have outlawed VAT rates being reduced or new exemptions applied.

 

[ROSM]

Sorry - this made me laugh

how does me saying that it has it roots in decisions taken by government since edward heath (which includes old labour, new labour, heath tory, major tory and thatcher tory) mean that I am simplistically blaming one person?

As for loosening regulation, this carried on a path commenced in the 80's and was supported by the tory and lib dem opposition.

As for recreating a manufacturing economy, this is a 30 year journey and much of the manufacturing we now do is 'new media' but it has grown significantly since the major policies of the mid 90s and it will be interesting if the new government policy is to continue this.

 

[simmo]

Sorry - this made me laugh


how does me saying that it has it roots in decisions taken by government since edward heath (which includes old labour, new labour, heath tory, major tory and thatcher tory) mean that I am simplistically blaming one person?

As for loosening regulation, this carried on a path commenced in the 80's and was supported by the tory and lib dem opposition.

As for recreating a manufacturing economy, this is a 30 year journey and much of the manufacturing we now do is 'new media' but it has grown significantly since the major policies of the mid 90s and it will be interesting if the new government policy is to continue this.

Because it is the default position of the left, to blame Thatcher for everything.

I note also that you do not question that the governments own national statistics which clearly show that there was a large debt when times were good (2006/7) (45% of GDP is high, around the 35-38% is/was the normal figure, well until now!) and the national debt massively rising after 2008 which would seem to show that my earlier suggestion that Labour did not cut spending at all following the reduction in tax revenues which came about after the recession and it was why we are completely in the soup now.

 

[ROSM]

Because it is the default position of the left, to blame Thatcher for everything.

I note also that you do not question that the governments own national statistics which clearly show that there was a large debt when times were good (2006/7) (45% of GDP is high, around the 35-38% is/was the normal figure, well until now!) and the national debt massively rising after 2008 which would seem to show that my earlier suggestion that Labour did not cut spending at all following the reduction in tax revenues which came about after the recession and it was why we are completely in the soup now.

as i said it was a quick post and I didn't check the data you added just the comment about thatcher. To quote Adam Boulton 'don't put words into my mouth or tell me what I'm thinking'.

It may suit your view to assume I blame thatcher alone as it allows you to quote the default position. i actually said (and stand by) that the policies of all governments since the early 70's had a significant hand in the issues we now face.

But you've got to admit she was an evil witch though wasn't she