UK facing VAT rise?

kabayiri

The options then :-
a) tax more
b) cut more
c) encourage growth

I guess they have given up on c) then?

There is a burgeoning huge new middle class emerging in India and China, all with brand expectations, and we can't even meet this?

HAMISH_MCTAVISH

N1AK

The issue with the 'encourage growth' mantra, that among others Labour like to push now in opposition, is that it isn't like we're trying to discourage growth already.

We went into a financial crisis with deficit spending and no financial reserves; financial prudence has allowed us to maintain competitive borrowing rates and avoid the kind of issues seen by many other nations.

Labour like the mantra of 'encouraging growth' because it allows them to pretend that they could pay everyone loads, borrow like there is no tomorrow and everything will be better. The problem is they can't really define what encouraging growth looks like, how we could do it and how to fund it without scaring lenders away and destroying our economy.

Does anyone really think that if the coalition believed they could throw government money around like confetti and suddenly it would be the land of milk and honey they wouldn't do it and reap the political rewards?

The_White_Horse

in times of trouble like this, the benefit brigade should be hit first. they contribute nothing and therefore, the charity they receive should be the first to go. then the grasping public sector who at least work for their handout. ok, they might be inept, and possibly 50% of the jobs are unecessary and overpaid, but at least they get up in the morning and go to work.

the private sector, who actually makes the money, should be lavished with tax cuts and red tape cuts in order to continue to make the money that pays for everyone else.

London and the home counties should also get further cuts as the engine of the whole country.

its sickening the way lefties want to punish the wealth creators and indicative of their financial naivity.

HAMISH_MCTAVISH

N1AK wrote: »

The problem is they can't really define what encouraging growth looks like, how we could do it and how to fund it without scaring lenders away and destroying our economy.

Does anyone really think that if the coalition believed they could throw government money around like confetti and suddenly it would be the land of milk and honey they wouldn't do it and reap the political rewards?

"We know that advanced economies with stable governments that borrow in their own currency are capable of running up very high levels of debt without crisis. And we know it, actually, best of all from the history of the UK – which spent much of the 20th century, including the 30s, with debt levels much higher than it has now."

But what about bond markets? Invoked as global bogeymen, we're warned that they punish governments who fail to cut spending – even if cuts don't reduce the deficit. I've never understood why the markets should care how and when we reduce the deficit, as long as we can pay our way. According to Krugman, they don't.

"That's the interesting thing. The actual verdict of the markets, for countries that have their own currencies, has been that they don't really care at all in terms of what you're doing in short-run policy." Likewise, the danger of being downgraded by a credit rating agency has been wildly overstated. "We saw it in Japan in 2002; they had the downgrade, and nothing happened. Which led us to predict that would happen for the US," whose credit rating was downgraded by one agency last year. "And it was exactly right. Nothing happened."
http://www.guardian.co.uk/business/2012/jun/03/paul-krugman-cassandra-economist-crisis

coastline

N1AK wrote: »

The issue with the 'encourage growth' mantra, that among others Labour like to push now in opposition, is that it isn't like we're trying to discourage growth already.

We went into a financial crisis with deficit spending and no financial reserves; financial prudence has allowed us to maintain competitive borrowing rates and avoid the kind of issues seen by many other nations.

Labour like the mantra of 'encouraging growth' because it allows them to pretend that they could pay everyone loads, borrow like there is no tomorrow and everything will be better. The problem is they can't really define what encouraging growth looks like, how we could do it and how to fund it without scaring lenders away and destroying our economy.

Does anyone really think that if the coalition believed they could throw government money around like confetti and suddenly it would be the land of milk and honey they wouldn't do it and reap the political rewards?

Can you expand a bit about what you mean...we went into a financial crisis with deficit spending and no financial reserves.
What are financial reserves...I keep hearing it...yet if you look at the figures over the decades there isn't a government who have ran a steady surplus..
All they ever do is spend the funds they bring in...balance the books...if not they add more to the national debt..

http://newsimg.bbc.co.uk/media/images/47530000/gif/_47530170_uk_budget2010_466x345.gif

grizzly1911

N1AK wrote: »

The point is that a rise in VAT doesn't make it harder for the poor to feed themselves; though it may make it a little harder for them to buy luxury items..

It might not make it harde rto feed themselves but if they want to smell nice or wipe their bums they pay VAT. If they want some orange juice they pay VAT if they have a headache they pay VAT. If they want the odd chocolate something they pay VAT.

If you look at a families grocery bill a number of non food "necessary" items are VAT rated.

Perhaps we should zero rate more necessary items and bang up the VAT on consumer electronics (not white goods) and media contracts.

coastline

At the end of the day the forecasters are using the same tactics that politicians use...they describe a sum of money with a headline figure.
How many times have we heard the equivalent of....1,000 policemen....600 nurses...2 hospitals...etc.
Vat to rise to..X...or save the money elsewhere.
What gets me so far is wheres the real savings...surely we should be looking to find waste...all people are seeing in general are cuts.
Wouldn't be a big surprise if pension tax relief was subject to a change...after all the subject is if you don't need it why should the government provide it..

http://citywire.co.uk/money/why-unfair-pensions-tax-relief-is-a-fair-target/a636804

grizzly1911

kabayiri wrote: »

The options then :-
a) tax more
b) cut more
c) encourage growth

I guess they have given up on c) then?

There is a burgeoning huge new middle class emerging in India and China, all with brand expectations, and we can't even meet this?

Kay Review: Government to be more active on takeovers

Professor Kay was asked to investigate ways of encouraging more long-term thinking in the City


The government says it will take "a greater interest" in mergers and acquisitions involving UK companies as part of its response to the Kay Review.


Its comments came in response to the Kay Review into how to discourage short-termism in markets.
The government has decided it should "engage with companies and their investors... to promote investment which benefits the UK economy".
There will be no change in legislation, Business Secretary Vince Cable said.
Prof John Kay's report, ordered by Mr Cable, suggests discouraging acquisitions that would threaten a firm's operations in the UK.
The takeover of Cadbury by Kraft of the US in 2010 was criticised at the time for valuing a short-term share price gains above the long-term welfare of the company and its staff.
It lead to the closure of one of Cadbury's long-standing production plants near Bristol with the loss of 400 jobs.


http://www.bbc.co.uk/news/business-20439315







Only about 30 years too late, horses have bolted and stable doors hang limply swinging in the wind. Prairie grass blows across the desolate waste.


Companies are quite happy to sell us the wares as long as they siphon off any benefits to their new home nations.

silverchair

The_White_Horse wrote: »

i am saying that if the money runs out and they stop getting paid - they may suddenly realise that there is no magic money tree with never ending funds!

If money runs out & they stop being paid, then they will find new jobs in a different sector, meaning a mass exodus of teachers & other public sectors. Im not sure how that is a solution to overspending. I for one do not spend money on a long commute & go to work in order to work for free.