Value added? Hardly

By Greg McDonald

If you were listening carefully as you ate your toast this morning you might have heard it rumbling down the high street like an earthquake, tumbling hungry shoppers into the streets in a feast of spending that will revive the British economy and save global capitalism.

You missed it? Then listen up. As of this morning the Government’s VAT cut is green for go and that new toaster you were planning on doing without for £14.99 has been slashed to just – and you might want to sit down for a moment here – just £14.69!

Pick up three toasters at once and you’ll almost have recouped your parking!

If today’s 2.5 percentage point cut in VAT sounds like a joke, it’s because it is. If this half-baked cut is really Brown and Darling’s gamble to win the next election then it ought to be game over. And if David Cameron had any better ideas – or indeed, any ideas at all – it would be.

Of the major parties only the Lib Dems’ Vince Cable has come up with ideas of appropriate fairness and boldness. The global capitalism crisis demands bigger thinking on credit, interest rates, mortgages and tax than either Labour or the Tories dare dream.

Rather, as the VAT cut kicks in today down your local Happy Shopper, I’m going to stick my neck out and predict that customers will somehow resist mob-rioting over 12p off Batman DVDs.

Comments

[Anon]

When I was a teenager credit was a new thing. As kids we debated whether we should save up for a record player and pay cash or should be get it on the weekly (not as though we had the money).

So what am I trying to say?

I still pay for most things by cash. Of course it's difficult to pay the mortgage in cash but we can at least save a big chunk of the deposit.

Should we not now be aiming to go back to buying only what we can afford in cash and not relying on credit?

[Adam]

It seems to me that the plight of the common man could be made slightly easier with one very simple solution -

Accountability at all levels over the way public money is spent. The amount of wasted taxpayers money in this country is, i'm sure, astronomical.

How about the government finding better more economical ways to spend the money they are already taking in times of crisis (Ie budget properly like everyone else is having to) and not allowing money to be wasted on unecessary things.

Perhaps if this was being done, we wouldnt have had to resort to this ridiculous gesture which will do little to ease the strain now, but which will cost us all dearly in the long run.

[sandy]

If the government wants us to start spending again they need to be putting extra money in our pockets. Lowering N.I, Tax or Council Tax would of made a difference. It doesnt matter if things are cheaper we dont have any spare cash to buy them wether there full price or half price!

[Smiffy]

Loans for house purchases are down 70% in the last month. The banks are not lending us that money the government threw at them. 21/2% decrease in VAT is just scandalous. Get those bankers by the throat and make them start lending again - else they'll just use it for shareholders premiums and fat-cat pay bonuses.

[Brian Wylie]

CAmeron has already come up with ideas but perhaps you didn't see them through your red haze. He wants the supply side stimulated first where the jobs are, or were, small VAT reduction will not do it and no one is buying high priced items if they are looking over their shoulders wondering if they will have a job next week. As I have said before here after looking at the Blair/Brown package I clearly wasted my time studying economics as Government policy, as always is Hope For the Best. They don't even plan for the worst which under Brown inevitably turns up.The thing we really need is planning and time, we have neither whilst Brown plays the infallible and his colleagues bluster about "leading the world" God help everyone if it turns out to be true. The likes of America don't care about the world, they care about their country.

[theoldswan]

Its surely a good thing that prices are down, granted you're not going to save a packet on day to day spending, but its the larger purchases Mr Darling is targeting, a new car, building projects etc where a decent saving can be made todat rather than defering the purchase. The reason most people are still frightened to spend is that they have been irresponsible with their borrowing and spending in the past, the old fasioned way of saving before you spend had long gone and people are now shell shocked that the banks have turned off the never never tap.

[jim]

Andy.. how right you are Orange and its main paymaster a media mogul will not want to be on the losing side at the next election.. look out for more jumping ship

[Andy]

Apologies for repeating myself. My fingers must have been trembling with excitement at the thought of the VAT cut.

[Andy]

".. fairness and boldness ..."

Indeed, we need lots of those things - unfortunately the money that could buy them has been squandered over the last 10 years and foreigners aren't exactly shoving each other aside to lend us any more.

I have to say it's rather upsetting to see Orange slagging off Labour in this way. Is this the end of its previously unqualified support? Is it because The Party ran out of sweeteners?
Or is it just that nobody loves a loser?

[Andy]

".. fairness and boldness ..."

Indeed, we need lots of those things - unfortunately the money that could buy them has been squandered over the last 10 years and foreigners aren't exactly shoving each other aside to lend us any more.

I have to say it's rather upsetting to see Orange slagging off Labour in this way. Is this the end of its previously unqualified support? Is it because The Party ran out of sweeteners?
Or is it just that nobody loves a loser?