bigsinky

Really? my kebab has always been £4.50, never notice the VAT on it. always loads of house sauce though *nods

tathan

Money has to come from somewhere.

There is a structural deficit... Remove the underperformance due to the recession (which was caused by bankers or whatever) and there is STILL an underlying structural deficit. Our spending is too high. This has been present for several years. Traditionally, you borrow when the economy is underperforming (recessions) and payback when you're back at capacity. This relies on your 100% functioning economy generating more money than your spending though, which ours does not.

At least ConDems are saying we'll be back at balanced books by 15/16. At which point we'll have a total borrowing of 1.5 trillion or thereabouts (I haven't seen the new figures), which we have to pay interest on (we already pay more interest on our debt than we spend on our schools).

tathan

Sort this double posting FFS

tathan

Yeah, hot food attracts VAT. Subway is pretty much the only place you see this I think, they charge extra if you have it hot. At least I assume that's what they're doing

bigsinky

you sure you have spelt this right?

TonyBurns

iTrader: (3)

That was years ago, well back in the late 70's or early 80's (probably around 80/81 when the tories added a takeaway tax of 10%)

Tathan, agree with you in part, but the economy suffered due to a global resession, not one brought on solely by labour's last government (which everyone thinks it did ) but too much vat wont get the economy going, it does the total opposite, this is why taxing in certain area's is better (I dont mind paying an extra 5p on a pint, dont care about cigs or spirits, dont want it on fuel, shame we have the lot in one easy go ) so it causes a resession, making debt worse, not better (quick someone get vince in as osbourne has not got a clue )

Tony

tathan

Typo

I think the VAT is politically motivated as it's indiscriminatory (and admittedly not the best approach). If they'd raised high end taxes the Tory core would have cried into their caviar, if they'd raised low-earning taxes everyone would have said "Same old Tories"; whoever they targeted they were going to get roasted for it, so they just targeted everybody. But yeah, the whole world suffered but we are suffering more because we already had this deficit. When everyone loses money, the man who was already borrowing is the one left in the most kaka.

Oh, and regarding George Osborne, the only way to think of him is as a empty vessel and hope to god whoever's behind him pulling the string knows wtf's going on!

Devildog

Tony, if you are seeking to allude that the 2.5% increase in VAT brought about nearly 5m people being out of work then its clear you have no understanding of the forces at work back then.

Let's look at this in black and white.

The stats say that the average uk household spent £471 a week in 2008 (most recent figures available) The various sources available suggest that around 7.5% of this is VAT

7.5% of £471 = £35 per week VAT cost. So the spend on vatable goods and services at 17.5% = £235 (including the VAT) per week

Up the VAT to 20% and the same spend on vatable goods and services would be £240, or £5 per week. That's per household (3.9 people I believe)

Is that figure likely to bring about rises in unemployment? Impossible to say. Will any increases offset the revenue generation? Again, impossible for anyone to call at this stage as there are many more variables at play, including the reduction in corporation tax and the reversal of the employers NI increase that Labour had wanted.

Some business sectors may see a reduction in sales, but then they are paying less tax on profits and less NI than was proposed.

If you believe that the reduction in VAT to 15% brought about an "end to the recession" then you need to stop reading the Mirror and wake up to reality. The seasonal effect of Christmas had a much bigger impact on spending than the 15% VAT rate did.

RobJenks

I remember when VAT was first introduced the rate was 8%.

tathan

Presumably that was before the government was almost half of the economy, feeling the need to run everything from the military to what nuddy pictures we look at.

Gordo

You're right that there is a global recession (which Labour didn't cause), but the fact that the UK is in very poor shape to deal with it is absolutely down to Labour. Just as in some industries, they're all affected by the downturn but some will go bust (those iwth management teams that ran their businesses in the same way that the Government ran our country for the last 13 years). The businesses that survive are those that managed their cost bases properly in the good times instead of empire building for vanity's sake.

TonyBurns

iTrader: (3)

That was the tories selling all our industry off yet another mess people will blame on a labour government (a minority labour government as the tories couldnt form an alliance so voted against any cost savings the labour government did at the time) but less of that the issue back then was the yanks (again ) and the 7 day war when they supplied Israel with arms etc, the other middle eastern countries then stopped giving out their oil, this caused a little problem etc, but its history though the yanks fooked it all up for everyone again....

The vat increase will cost far more than you have stated, on an average car which does average mileage, it will cost on average 360 pence to fill up the average 60 ltr tank (2 to 3 times a month), add gas/electric/water/bills/food/clothing/beer etc to that, its not cheap, they basically just hit everything because they couldnt be bothered hiting specific area's.

Will it affect spending? of course, you will still have the same take home pay, you just wont have as much to spend on it due to everything going up
This will have a knock on effect, just as it did in the 80's, and its a painful reminder of how not to tax people, it makes the poor even poorer (not many of those on less than 10k, average will be 12k) so it will slow down the economy, not a good thing as that's what puts you into resession.

Interesting reading your points though DD

Tony

TonyBurns

iTrader: (3)

Agreed that they didnt do a very good job, but atleast they tried to keep the country running, you really need someone who has a head for figures as the chancellor and not an MP.
See what happens next year, dont think it will be pretty though

Tony

David Lock

Do you own a printing company?

dl

Devildog

Gas, electricity, water, non luxury foods will not be subject to the VAT increase.

And you need to do your sums again

A 60 litre tank at say £1.25 a litre will cost you £75, or £63.80 plus vat to fill

At 20% VAT the tank will cost you £76.56 including the VAT - an increase of £1.56 per tank, not £3.60

Of course the cost of living will go up with the VAT increase, but something had to be done.

pslewis

Didn't the Tories say that they had no plans to increase VAT?

I think they did .... Tories not lying, are they??

J4CKO

iTrader: (1)

I dont mind if it makes a little difference, people buy too much **** anyway, too much stuff, too much waste, just too much, if you cant afford it dont buy it.

its a step in the right direction, bit of a reality check after years of labour not realising, just need to re-establish the link between work, effort and reward, wean the benefits generations off just claiming like a rat getting its bit of cheese, maybe even suggest that the country has a bottom line that affects everyone else, not everyone can take take take, I know most of the Jeremy Kyle audience dont care but they might start to if the gravy train stops.

J4CKO

iTrader: (1)

I dont mind if it makes a little difference, people buy too much **** anyway, too much stuff, too much waste, just too much, if you cant afford it dont buy it.

its a step in the right direction, bit of a reality check after years of labour not realising, just need to re-establish the link between work, effort and reward, wean the benefits generations off just claiming like a rat getting its bit of cheese, maybe even suggest that the country has a bottom line that affects everyone else, not everyone can take take take, I know most of the Jeremy Kyle audience dont care but they might start to if the gravy train stops.

lozgti1

Love the names for all the taxes but 'Value added' is a great one

F1 CJE UK

iTrader: (8)

vat seems the best way, the more you spend the more you pay. glad i had my big spends this year.

just to add i work for John Lewis and the cost of the price changes is massive, i agree 22% and get it done with asap.

Timwinner

iTrader: (3)

Awesome budget, I am a couple of hundred quid worse off but I dont mind doing my bit. I will revisit my conclusion in a year or so when I believe we might be heading towards a recovery.
Good work Tories/liberals. I especially like the cap on housing benefit!!!!
I enjoyed it when it was a free for all and I am man enough to take the pain now its not so bright.

Jaydee5

Thankfully, I'm in a position to "take it on the chin". And if it means a better future for my kids, I can live with the stuff that came out today.

I could have been born in some under developed ****e hole with absolutely no future for me and mine whatsoever!

jjones

at least this way the benefit scroungers also get to help with the dept repayment

bigsinky

Like Scotchland

Martin2005

I agree it was a pretty smart budget, but as always too much politics not enough hard action. There has to be a strong argument for not faffing around with lots minor tweaks to small tax measures, and instead putting up income tax, it is afterall suposed to be the most fair/progressive way for the government to raise money.

Politics hey

dnc

Impossible to please all of the people all of the time. I'm no economist so cannot predict what the effect of the 20% VAT rate will be but, in common with other posters, I did not suddenly become super rich when it was reduced to 15%. I thereby predict I will not become 'poor' at 20%. As I said, the bigger picture is a different matter but I don't see how this rate in isolation would significantly effect the economically active among us and thus no downward spiral. However....................

In simple terms, if you ignore the macro economics, revenue generation by collecting VAT is a relatively fair way as purchasing is a discretionary act (with exceptions of course, which should be VAT exempt or subsidised and may be but I don't actually know ).

dnc

ScoobyDoo555

Got to agree - good budget.

OK vat goes up. hey ho. A small price to pay for having balanced books (amongst other cuts) by the next general election (2014 ish)..... smart move imho.

And as for kick starting people back into the jobs market.... well about fookin time.

Business seems to be quite content with this budget too....

All in all - quite positive... with a "ouch - this might hurt a bit, but not much".....

But then what do I know? About as much as the rest of us mooks on the Internet!

RA Dunk

**** off ya paddy git!

tathan

Anyone else worried by the fact that we're going to have higher taxes due to labour's incompetence and in 4 years time, we're going to have them again because their supporters won't accept the blame and subsequent need for tax increases to pay back their last effort, and just insist this is 'same old tories again'?

RA Dunk

Hmmmmm, wheres Pete at?, seems he has started this already.