Iain Dale 8:29 PM
(Gordon Brown - Sunday 23 November, quoted in the Times on 24 November)
I would lay bets that the government will have to put VAT up beyond 17.5% at some point over the next three years. Basic economics tell you that if the cost of the 2.5% cut is to be recouped you can't do that just by putting it back on in 13 months time. Robert Peston predicted that the new VAT rate would be 22.5%. He was wrong - but only on the detail.
It seems the Government plans to put the rate up to 18.5%, but only after the election has been and gone. How very strange. Not. The BBC has the full story HERE. The above graphic is from a document called EXPLANATORY MEMORANDUM TO THE VALUE ADDED TAX (CHANGE OF RATE) ORDER 2008 2008 No. 3020. The Government say that this was left in the document in error. George Osborne has been quick to seize the political initiative..."This is Labour's secret tax bombshell. It explains why there is a black hole in the PBR. Because at the last minute Gordon Brown clearly decided to keep secret his plan to hit everyone with an extra tax rise to pay for his borrowing binge. Gordon Brown told us that he would have no “hidden manifesto” and that “everything is above board”. But these documents show that Labour was planning to deceive the British public, and will raise VAT on everyone after the election. Labour have a secret tax bombshell set to explode under the British people if they ever get re-elected. It tells you all you need to know about Gordon Brown and Labour."
Have you ever seen a budget unravel so fast? Well, OK, the last one did too, but it's a sure sign of a government in real trouble when this sort of thing happens.
Tuesday, 25 November 2008
Labour Tries to Deny VAT Hike to 18.5%
There is no “hidden manifesto” – “everything is above board”.
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