"Vat's the way to do it.."

I have become very angry over the last 24 hours listening to the absolute bollocks that has been peddled by TV news (ITV and BBC for a change) about yesterday's increase in VAT.

Let's look at some of the quotes that have been shown in interviews with politicians and on the street vox pops :

"My business will suffer because the increase in VAT will leave people with less disposable income" - absolute bollocks. It will have no effect whatsoever on disposable income as it is a tax on spending not income. Nice scaremongering though.

"I'm worried about the increase in food prices." This from a student. As there is no VAT on food, the only reason I can think of for believing this - apart from the fact that he may possibly be a brian washed leftie that believes Milipede propaganda - is that a student's version of food comes across the bar or in takeaway wrappers. That's not real food, mate, so it doesn't count. Learn to cook!

"We're no going to be able to go out down the pub with our mates or eat out when we want. It's not fair!" I think that just about sums up the out of touch with reality element in this country.

"A family on £25,000 a year is going to be £396 a year worse off." Now what the fuck do you base that on? Needless to say the calculation is not explained. As VAT is on spending not income, exactly how are we able to make this comparison? Lies, damn lies and statistics...

"It hits the poorest families more than the rich." More bollocks. It's nonsensical to look at the effect on earnings as it is a tax on spending. If I earn a million quid a year and spend sod all, then there is no VAT. Ditto if I earn fifteen grand. More accurately, you should look at the effect on spending power and not income. When you do this, it actually hits the richest worst.

"Comsumer groups warn that businesses will put up prices by between 5 and 8 per cent not just the 2.5% VAT element." Well for a start the actual increase is less than 2.5% because it's on the NET figure not the figure that already includes tax. Furthermore, if this is the case, it is called PROFITEERING and that is fuck all to do with the VAT increase - it's just opportunistic greed!

Miliband says it is the wrong tax at the wrong time. He refuses at all junctures to answer the question "What would you do instead?" This is because the only viable alternative is National Insurance - and that really does hit the poorest worst because it hits their wage packets and employers' wages bills.

He also conveniently forgets that the last Labour government tried to raise VAT twice but the move was blocked by Gordon Brown. And the perpetrator of the idea was - er - Ed Miliband.

One word of common sense came from a pensioner : "We've all got to pull our horns in 'cos we've got no money. Labour spent it all. Anyway, we've managed before and we'll do it again"

That last one was on the local news. I'll bet it doesn't make the nationals...

"Vat's the way to do it.."

I have become very angry over the last 24 hours listening to the absolute bollocks that has been peddled by TV news (ITV and BBC for a change) about yesterday's increase in VAT.

Let's look at some of the quotes that have been shown in interviews with politicians and on the street vox pops :

"My business will suffer because the increase in VAT will leave people with less disposable income" - absolute bollocks. It will have no effect whatsoever on disposable income as it is a tax on spending not income. Nice scaremongering though.

"I'm worried about the increase in food prices." This from a student. As there is no VAT on food, the only reason I can think of for believing this - apart from the fact that he may possibly be a brian washed leftie that believes Milipede propaganda - is that a student's version of food comes across the bar or in takeaway wrappers. That's not real food, mate, so it doesn't count. Learn to cook!

"We're no going to be able to go out down the pub with our mates or eat out when we want. It's not fair!" I think that just about sums up the out of touch with reality element in this country.

"A family on £25,000 a year is going to be £396 a year worse off." Now what the fuck do you base that on? Needless to say the calculation is not explained. As VAT is on spending not income, exactly how are we able to make this comparison? Lies, damn lies and statistics...

"It hits the poorest families more than the rich." More bollocks. It's nonsensical to look at the effect on earnings as it is a tax on spending. If I earn a million quid a year and spend sod all, then there is no VAT. Ditto if I earn fifteen grand. More accurately, you should look at the effect on spending power and not income. When you do this, it actually hits the richest worst.

"Comsumer groups warn that businesses will put up prices by between 5 and 8 per cent not just the 2.5% VAT element." Well for a start the actual increase is less than 2.5% because it's on the NET figure not the figure that already includes tax. Furthermore, if this is the case, it is called PROFITEERING and that is fuck all to do with the VAT increase - it's just opportunistic greed!

Miliband says it is the wrong tax at the wrong time. He refuses at all junctures to answer the question "What would you do instead?" This is because the only viable alternative is National Insurance - and that really does hit the poorest worst because it hits their wage packets and employers' wages bills.

He also conveniently forgets that the last Labour government tried to raise VAT twice but the move was blocked by Gordon Brown. And the perpetrator of the idea was - er - Ed Miliband.

One word of common sense came from a pensioner : "We've all got to pull our horns in 'cos we've got no money. Labour spent it all. Anyway, we've managed before and we'll do it again"

That last one was on the local news. I'll bet it doesn't make the nationals...

Reasons I'm Not Cheerful - part 3

Ian Dury might have been cheerful, but I bloody well ain't, so as my last offering with the Blockheads seemed to be fairly well recieved, here's a short reworking of another Ian Dury classic.

And a mighty fine backing group they make, too...

Reasons I'm Not Cheerful - part 3

Ian Dury might have been cheerful, but I bloody well ain't, so as my last offering with the Blockheads seemed to be fairly well recieved, here's a short reworking of another Ian Dury classic.

And a mighty fine backing group they make, too...

VAT - what next?

VAT will go up in tomorrow's emergency budget.

Let's look at the history :

VAT was introduced in the early 1970's, replacing various sales taxes that had existed until then.
Rates were increased in Geoffrey Howe's first budget, paying for income tax reductions and attempts at budget deficit reductions (sic).

Rates were increased again in 1991 to pay for John Major's cuts in the the poll tax.

The VAT tax base was also extended in 1984 to hot take away food, and building improvements. A particularly controversial extension to domestic fuel spending was made in 1994.

Initially, the basic rate of VAT was set at 8% with a higher rate of 12.5% on luxuries, but this didn't last long and in 1979 a single rate of 15% was introduced. The current rate of 17.5% was introduced in 1991 where it has pretty much remained ever since.

I reported recently on the problems in Greece where the rates have gone from 8%/18% to 10%/21% in the last few months. Also, current EU law stipulates that the basic rate cannot be less than 15% and the lower rate not less than 5%, so we aren't much over those minima at the current rates.

Denmark, Hungary and Sweden lead the table with 25%. Only Cyprus and Luxembourg (15%) and Spain (16%) have lower rates than the UK and I wouldn't bet on Spain staying that low. In general then, most European rates are higher than ours.

My bet is on a new rate of 20% and I wouldn't bet against reintroducing the luxuries rate of 25% again either - as long as the luxuries they cover don't include the everyday basics of life.

Whatever happens, let's at least look the public straight in the face and tell them how it is. We had enough of stealth taxes from the last prat...

VAT - what next?

VAT will go up in tomorrow's emergency budget.

Let's look at the history :

VAT was introduced in the early 1970's, replacing various sales taxes that had existed until then.
Rates were increased in Geoffrey Howe's first budget, paying for income tax reductions and attempts at budget deficit reductions (sic).

Rates were increased again in 1991 to pay for John Major's cuts in the the poll tax.

The VAT tax base was also extended in 1984 to hot take away food, and building improvements. A particularly controversial extension to domestic fuel spending was made in 1994.

Initially, the basic rate of VAT was set at 8% with a higher rate of 12.5% on luxuries, but this didn't last long and in 1979 a single rate of 15% was introduced. The current rate of 17.5% was introduced in 1991 where it has pretty much remained ever since.

I reported recently on the problems in Greece where the rates have gone from 8%/18% to 10%/21% in the last few months. Also, current EU law stipulates that the basic rate cannot be less than 15% and the lower rate not less than 5%, so we aren't much over those minima at the current rates.

Denmark, Hungary and Sweden lead the table with 25%. Only Cyprus and Luxembourg (15%) and Spain (16%) have lower rates than the UK and I wouldn't bet on Spain staying that low. In general then, most European rates are higher than ours.

My bet is on a new rate of 20% and I wouldn't bet against reintroducing the luxuries rate of 25% again either - as long as the luxuries they cover don't include the everyday basics of life.

Whatever happens, let's at least look the public straight in the face and tell them how it is. We had enough of stealth taxes from the last prat...

The View from the Taverna

You can always tell a good place to eat. Walk into any town past all the quiet restaurants and join the queue for a table outside the one that's heaving!

We've had a number of excellent Greek meals at a Taverna in Lakka called Nionio's - or Onions as the Brits call it. It's been in business since 1945 and you can tell why. The food is excellent, the front man positively exudes charm and the prices are reasonable.

Anyway, enough of the plug. I got chatting to the guy who runs it. His English is a hell of a sight better than my Greek. So I asked him where the people were? He replied "They don't come this year." simple, but sussinct and to the point. "Why?", I persisted. "They don't got no money." Good point.

Digging a little deeper, I asked what he thought had gone wrong? "Is your government", he replied. "They take all your money. And the exchange rate," he continued, "it's no so good for you. But now you have new government, so we hope this will be a good thing."

I explained that we thought everything was a good thing compared to the dreaded Broon. He replied "Your man did not seem very bright to me." So there you have it in a nutshell...

We discussed the other Broon stuff - i.e. the Broon stuff Greece seemed to be in. He replied "Keep the pound. Worst thing we ever do is to join the Euro. Prices went up 300% overnight." I've never heard a figure that extreme before, but this is a small island off the beaten track, so who am I to argue?

(I discovered a few days later that the reason for this was that Greeks tended to think of a minimum price of 100 drachma and when the Euro was introduced the thought processes moved to a minimum price of €1. Hence the 300% increase!)

Onions is a great place to eat and the prices are keen, but you still won't eat dinner for two there for less than about €30. A few years ago you could eat well for about €20 - and the exchange rate was better.

On the bill I was handed there were two columns headed 8% and 18%. These reflect the VAT rates of food and others (specifically booze). The current rate is 10% and 21%. He explained to me that these receipts were recently printed and if he were to change them every time the VAT rate changed, it would cost a fortune in printing! The higher rate is to go up to 23% shortly...

It made me reflect on what could happen in the forthcoming emergency budget once the true extent of the mess Broon left the UK's finances in is finally revealed!

The View from the Taverna

You can always tell a good place to eat. Walk into any town past all the quiet restaurants and join the queue for a table outside the one that's heaving!

We've had a number of excellent Greek meals at a Taverna in Lakka called Nionio's - or Onions as the Brits call it. It's been in business since 1945 and you can tell why. The food is excellent, the front man positively exudes charm and the prices are reasonable.

Anyway, enough of the plug. I got chatting to the guy who runs it. His English is a hell of a sight better than my Greek. So I asked him where the people were? He replied "They don't come this year." simple, but sussinct and to the point. "Why?", I persisted. "They don't got no money." Good point.

Digging a little deeper, I asked what he thought had gone wrong? "Is your government", he replied. "They take all your money. And the exchange rate," he continued, "it's no so good for you. But now you have new government, so we hope this will be a good thing."

I explained that we thought everything was a good thing compared to the dreaded Broon. He replied "Your man did not seem very bright to me." So there you have it in a nutshell...

We discussed the other Broon stuff - i.e. the Broon stuff Greece seemed to be in. He replied "Keep the pound. Worst thing we ever do is to join the Euro. Prices went up 300% overnight." I've never heard a figure that extreme before, but this is a small island off the beaten track, so who am I to argue?

(I discovered a few days later that the reason for this was that Greeks tended to think of a minimum price of 100 drachma and when the Euro was introduced the thought processes moved to a minimum price of €1. Hence the 300% increase!)

Onions is a great place to eat and the prices are keen, but you still won't eat dinner for two there for less than about €30. A few years ago you could eat well for about €20 - and the exchange rate was better.

On the bill I was handed there were two columns headed 8% and 18%. These reflect the VAT rates of food and others (specifically booze). The current rate is 10% and 21%. He explained to me that these receipts were recently printed and if he were to change them every time the VAT rate changed, it would cost a fortune in printing! The higher rate is to go up to 23% shortly...

It made me reflect on what could happen in the forthcoming emergency budget once the true extent of the mess Broon left the UK's finances in is finally revealed!