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Blog: VAT rise foreshadows more blows to come in 2011
Tuesday 4th January 2011, 5:10AM GMT.
Blog: The political cover story for VAT rises is that it is an optional tax. You can choose whether to pay it or not, because you don’t really need that new television or new car, and it isn’t charged on vital items like food and children’s clothes.
But it isn’t really an optional tax because for people living in the country you don’t really have a choice about having a car, and therefore paying for fuel which, as you will have noticed, is now even more expensive than the already expensive price it was.
It may prove, however, that the impact of today’s VAT rise is not all that great. When Labour temporarily reduced VAT in a bid to stimulate the economy, a lot of people said they hardly noticed.
Some retailers will be absorbing the costs to hold down prices.
Meanwhile Telford & Wrekin Council which, like other councils, is having to cope with a big cut in funding, has revealed a package of measures to save money.
More street lights will be turned off. There will be fewer repairs to roads and pavements. The grass won’t be cut so often. Some charges will go up. And so on.
While the VAT rise makes the headlines, it is a small blow in comparison to the flurry of blows which will fall during 2011.
They will fall on everyone. But, if they fall disproportionately on the poor, the feelings of resentment will be politically explosive.
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This morning I already noticed the increase in the price of fuel – they were quick to do that.
However, when the VAT went down recently – goods didn’t.
I agree lets get this country out of financial trouble – but lets pay ourselves back when we do.
I fear though, by then, it may be too late for some.
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