Tuesday, 1 May 2012

Ed Miliband is an Imbecile Part 2

From the Grand Plan:

Reversing the Tory-led Government's damaging VAT rise now for a temporary period - a £450 boost for a couple with children - immediate help for our high streets and for struggling families and pensioners.

The Tories hiked the standard rate of VAT up from 17.5% to 20% therefore the £450 is the monetary value of the 2.5% difference. It is unclear how "temporary period" is defined but a fair assumption would be a year given that this is the length of time that the previous VAT cut and other tax cuts mentioned in the Grand Plan last for.  It then follows that at the current rate of 20%, Labour's couple with children pay £3,600 in VAT a year or rather, spend £21,600 on VATable goods and services. Large household expenses such as mortgage payments, loan repayments, council tax, train season tickets, and insurance premiums are not subject to VAT. Most essential food items are not subject to VAT. Children's clothes and shoes are not subject to VAT. To have over £21k to spend after tax and after the items mentioned above have been paid for certainly does not strike me as typical. Indeed the poor that Labour purport to defend from the baby-eating kitten-stomping Tories will be nowhere near £450 better off. Highly disingenuous of Ed and Labour. 
Perhaps worse, the last VAT cut was done at a loss to the Treasury of around £12B so expect similar if Labour were to do this again. They are being cagey by not explaining how they are going to fund this, but point two of the Grand Plan gives a clue:

Bringing forward long-term investment projects...

Yep, that's Labour speak for "despite the fact that the country is running a budget deficit of over £120B a year, we're going to borrow even more fucking money."  Idiots.

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