VAT RISE IS PERMANENT: 50% INCOME TAX RATE TEMPORARY

Mr Osborne, back from his estimated £11,000 (over twice the annual retirement pension) holiday in millionaire playboy ski resort Klosters has said that he considers the VAT rise to 20% to be permanent, and has indicated that he would rather reduce income tax rates than reduce VAT, and that the 50% rate Income Tax is a temporary measure. OK, that throws up a couple of points.

Last night I saw some Liberal Democrat blokey in Oldham and Saddleworth pointing out that the VAT rise was an unfortunate but necessary step taken reluctantly by the coalition, totally unforeseen by either party, prior to the election (which would explain why they both said they had no intention of raising VAT).

It was, said this blokey (whose name I didn’t get), on the BBC tea time news, all down to Labour leaving the country in such a terrible mess.

When pressed on the fact that the Liberals had said that they would not raise VAT, he said that they wouldn’t have done if they had been living in some parallel universe where the country’s finances weren’t in such a mess, but they hadn’t known about that before they won power. This begs the question, why was Vince Cable going on and on about the parlous state of the finances, indeed the only person to do that, if the Liberals didn’t think they were that bad?

Ideologically the Tories prefer a sales tax to a tax on income. Mrs Thatcher took VAT from 8% - 15% and reduced income tax in her first year in office. Mr Major put a further 2.5% on in 1991. In 1994 the Tories put an 8% VAT on domestic heating, which was reduced by Labour in 1997.

Before this election Mr Osborne said that his party had no intention of raising VAT, yet within a few weeks of taking up office he had announced his intention of making the standard rate 20% in order to pay down the deficit left by Labour. And now, on the first day of its operation, it has become a permanent feature.

Is this Osborne’s way of getting back the tax breaks for the criminally low paid under £10,000 a year, whom the Liberals have pushed them to exclude from tax over the next five years?

So to all the ordinary people who voted Conservative (or Liberal) you should be aware that unless you earn over £150,000 a year, you will be subsidising the rich with your increased VAT payment.

(As an afterthought, it is also a matter of not inconsiderable shame that it is likely that in a single week just before Christmas, while Mr Osborne was preparing to leave on that holiday, it is estimated that over 2,500 people in England and Wales died as a direct result of the cold. I have no comparable figures for Scotland, but last winter 2,900 people died of the cold.)

I hope you enjoyed Klosters Mr Osborne.

PRICES AND INFLATION WILL RISE AS VAT GOES UP IN JANUARY

"No Sire, I promise, there will be no increase on Duchy Originals. No one could possibly consider them a luxury unless they were a registered sadist." Prince Chick enjoys a cup of tea, while wee Osborne is only allowed a glass of water and the guy at the back stifles a yawn.

So from January 4, VAT is set to rise from 17.5% to 20%. It will push up prices of a wide range of goods and services.

There are some things which are VAT exempt such as most food items, books, newspapers, magazines and children’s clothes.

But the increase will apply to items which the government considers to be luxuries; for example chocolates, ice cream, biscuits, etc.


Of course, when the last government reduced VAT in order to try to stimulate the economy by reducing prices, we all laughed at them. It was, we said, a matter of a few pence here and a few pence there. A t-shirt from Primark came down 6p; one from Next by 15p. A pair of shoes was maybe 40p cheaper. Even on big items the price difference was small enough not to make a huge difference. If you were going to spend £1000 on a tv, the saving was only around £20. Not much on that level of expenditure. It certainly wasn’t going to persuade you that, yes, after all you could afford it.

It’s the same kind of rise. A few pence here and there added to the price of ordinary items and even with big items, it’s not an earth shattering amount. Even a car which was priced at £15,000 will now have a price tag of £15,300.

However, in as much as the last government maintained (and was backed by figures) that the VAT reduction stimulated the economy, the VAT reduction will serve the opposite purpose.

The government reckons that the move will bring in around £13 billion... and that’s money that will now not be used to purchase other goods, keeping other stores and businesses alive. Another downer is that there will be an upward effect on inflation.

Of course if you go to France you’ll find VAT is already around the same percentage at 19.5% and in Germany it is at 19%. In some of the more prosperous countries of the Union VAT is far higher. However, it should be remembered that in different countries, different levels of other taxes may make up for this for example income tax starting at a far higher level or charged at a smaller percentage.

One question I have always wished to know the answer to is: there are items here which are exempt for the tax: essential foods and children’s clothes I can understand. What I do not understand is why books, newspapers, and magazines are VAT free.

It’s not that Mr Murdoch wouldn’t like it, is it?

THEIR JOBS CONCERN WATER, BUT THEY PREFER CHAMPAGNE AT YOUR EXPENSE

What in the name of goodness is it that makes people think that, the moment they can lay their hands upon the public’s money, they have carte blanche to spend it any old how they want, on luxuries for themselves?

According to an article in the Herald the Water Industry Commission for Scotland (WICS), set up to keep water bills down, has spent tens of thousands of our pounds on trips to luxury resorts, expensive dinners and sporting treats for its staff.

They spent almost £25,000 on a visit to a five-star hotel in England (why England?) and over £3,000 on hospitality at the Edinburgh’s New Club. Further there were Christmas parties and a wine-tasting event.

The WICS was set up in 2005 to encourage Scottish Water to reduce prices (Why can't the government just tell them to do it?) It has six commissioners including a chairman and a chief executive and 23 staff funded mainly by Scottish Water.

In 2007, it spent £14,616 on a staff awayday at Hamilton Park Racecourse, including two overnights in a top Glasgow hotel, a nightclub visit, champagne reception and luxury foods. Then 25 of them went to a seminar at a five-star hotel and spa again in England, all of which cost you and me £24,286.

In 2009, to mark the completion of a piece of work, staff were treated to a £3,500 celebration at around £40 a head. (I thought that reward for work was a salary?) There was a party at Rufflets Hotel, St Andrews costing £9,088 in 2008 and another costing £8,427 last December. Football matches and wine tasting evenings also figure in the entertainment you have been providing for these clearly VERY special people. An analyst was given £1,796 for flights between the UK and Switzerland so that he could see his family at weekends. Awwwww.

A Glasgow SNP MSP Bill Kidd said: “This is nothing more than jollies on a grand scale......... Once again the arrogance, insensitivity and downright greed of public service fat-cats is exposed, and it really needs to be addressed.”

David Whitton, Labour’s shadow finance spokesman, said that he was absolutely astonished that a public body felt it could spend money this way and suggested that officials at the WICS should explain their spending in front of the parliament’s finance committee.

I’m almost speechless. I read in other papers that Westminster is considering putting VAT on food to try to pay off some of the debt that Labour has run up and on the same day I’m reading about people who spend more than the royal family on their food... and we are paying for it.

I agree with Mr Whitton. Haul these people before the finance committee of Parliament and let’s hear all about what a set of greedy self-serving pigs they are.

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