The return of Old Labour

So the Chancellor's finally done it - cut VAT to 15% to try and 'stimulate' the economy and massively increase borrowing to try and bail Britain out as it faces the stark reality of a serious recession for the first time in nearly 20 years. The first of these two measures won't translate into a 2.5% reduction in High Street prices and it won't produce the 'feel good factor' which consumers so desperately need at the present time. A modest increase in personal allowances, actually putting more money directly into people's pockets, would have been far more beneficial for the economy.

The massive increases in public spending, particularly on capital projects, represent nothing less than a return to the failed, Old Labour policies of the Seventies. Who's going to pay for all of this profligacy? In theory, the 'rich' we are told, meaning those earning over £100K a year. Alas, it's not going to work - or at least work quite so simply as Mr Darling and Mr Brown imagine. I'm not one of them by a long way, but people who earn enough money for it to be worth bothering about tend either to know what the tax dodges are or, they have accounts and financial advisers at their disposal who can tell them. One wonders how much more money is quietly going to find its way into offshore accounts as a result of the measures which are being introduced. Quite a lot, I would guess.

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Of course it's difficult to avoid the suspicion that Mr Darling is intent on creating as much mess as possible so that when the Tories win the next election (and they will do) 'new' Labour can blame them for the country's troubles.
 

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