The coming Tory attack on Brown

Samanatha

All true unless the VAT move is part of the stimulus package - in which case Cameron and Osborne look totally up the creek without a paddle.

Short the UK

Brown is going to totally fail. He will be a broken man. The Labour party could be destroyed by this disaster. They are now deluded bulls. The Tories are now the sensible bears and they are going to kill the bulls. Time and patience are all that is now needed.

I now see the MSM are starting to get twitchy about the Great British Krona: see Patrick Hosking in the Times today. He's probably been reading Willem Buiter's blog - hurrah.

Prodicus

All of which is why my money is on a very early election. He won't wait for results - real or Brownie. He'll go for a vote before the sky is dark with homebound chickens - and probably before CCHQ have the right-sized boots on. He still may lose, though. Then - pity the Tory government who will be in place when the pound converts to the krone.

Dean

Of course Ken Clarke supports a fiscal stimulus. Since it is obviously a necessary (but not sufficient) condition of digging the economy out of a slump, I am surprised that you are surprised. You don't need to read Samuel Brittain and Roger Bootle to see that the Tories' plans for spending cuts are mad, you just need to use your common sense..

Rob C

Personally, I think a VAT reduction would be a bad move - it will make little difference except to encourage people to spend what they can't afford. Small businesses will find the repricing a bind and thus some of the difference will need to be absorbed to cover the time and cost of re-printing prices and re-labeling goods etc. For most goods that are imported, it will simply offset some of the increased costs resulting from devaluation of the pound anyway and thus may not be passed on at all. Therefore, it would serve only to replicate the cuts in interest rates - largely absorbed by the banks. Direct tax reductions are far better as they will not only allow those that can afford to spend more to do so (making the most of bargains already out there), but those that can't afford to spend can use them to reduce debt. For some, perhaps even get a stay of execution on repossession. Enticing people to spend more if they can't afford it is not just irresponsible, but will serve to feed the debt bubble longer and thus prolong the recession. Here are my top 3...
1) Abolish the TV license - this is inevitable long-term anyway as more and more sign up for non-payment campaigns due to BBC bias, failing standards etc.
2) Increase personal allowances
3) Better funding of local authorities, conditional on a cut in council tax. All free bus passes for example should be centrally funded for a fairer cost distribution.

mitch

The way I see it brown has thrown billions at the problem and nothing has changed at all.
Banks wont lend,house prices are tanking and we have a shiny new recession so what has he achieved?

marbury

Suggest deleting "one of" and "most" and replacing with "only"

Albert son of a gypsy.

Read Guido Fawkes this morning and last thursday:

"""Northern Rock Sinking Taxpayers II""""

""""As Guido reported Thursday and all the papers followed up yesterday - Northern Rock's £35 billion Granite Trust is in trouble, buried in the financial jargon is one important note - the percentage of delinquent loans relative to the value of mortgages in the trust rose above pre-set levels. Three different arrears triggers have been breached - remember how Brown and Darling blatantly lied that the taxpayer's money was secured by the mortgage assets of the bank? Guido repeatedly argued that the only assets of the bank were in its branches. Net-net, the loan book will turn out to be near enough worthless or even negative in value.

The £3 billion of capital injected by the government in August can be kissed goodbye, another £3 billion will be needed soon and that will almost certainly go up in smoke as well. Well done to Vince Cable for giving the government such fulsome support in wasting billions- 28 million taxpayers won't thank you.

This is an amount enough to give every income-tax payer in the country a £1000 reduction for a year. A targeted fiscal stimulus. What exactly is the taxpayer gaining for subsidising """"

THE CONSERVATIVES SHOULD DEMAND AN EMERGENCY DEBATE ON NORTHERN ROCK! This will kill off any 'good news' for Brown and Darling and also silence CABLE for ever!

Luke

You badly underestimate the danger for the tories that by tuesday morning, they face a government which has Ken Clarke's support for a fiscal stimulus package which they oppose.

David Short

You guys blindly support the Tories, but they are no Conservative party that any true Tory recognizes.

You perhaps have too many Scottish 'thinkers' among you.

JimBob

Its healthy banks, not just a fiscal stimulus, that businesses need. If Dumbo Brown's bank interventions don't turn out right then the fiscal spend will be money down the drain.

Nicholas

Increasing VAT is ridiculous. The whole point of it was that it was supposed to be a discreet sales tax and a sales tax of 17.5% is already ridiculous. Putting VAT on everything at 22% is practically an income tax that will directly hit the poorer families - everything they use their income on, including fuel bills, food and books/magazines for their children subject to 22% tax? In fact it's worse than that because almost all spent income following tax deduction will be subject to a further 22% tax. Ridiculous and verging on depraved.

As for Dean's "the Tories' plans for spending cuts are mad", leaks today suggest Darling is going to admit there will have to be tax rises but no decrease in government spending, rather a continuation of already committed government growth, until 2011. That is madness. Especially so given the staggering extent of government waste and profligacy.

To push ahead with plans to make government even bigger and therefore more expensive is absolutely bonkers. A bit like David short's inane comment.

And Luke, the disappointment on Tuesday following Darling's disastrous attempts at stimulus, all no doubt wrapped up in a sticky web of ifs, buts, maybes and small print, will override any concerns about Ken Clarke.

Athesius the Facilitator

Somebody called DEAN mentioned Tory spending cuts. They have never said they would cut spending. They said it would rise at a slower rate. That is not a cut and it is the right thing to do in this Brown created problem that we are in.

This is what is going to happen I reckon. Big borrowing for fiscal stimulus, it fails but it's spun as though it is a success. The Tory's try hard to to get the message across that it hasn't worked but get out spun. Constant smearing and haranguing by various commentators eventually persuade the Tory,s to stay in the bunker. Ted Heath alias Simon Heffer his ilk keep sticking the knife in and Peter Mandelson keeps networking. Eventually the british public go to the poles thinking that they must vote for the party who are in power as the Tory's will be so fed up of being smeared that they will not come out fighting in the way a prospective government should. It is a great shame that this once great democracy has fallen to the level where spin and lies alone persuades the electorate who they should vote for. It's so depressing.

Ben

As a Conservative supporter I am feeling less bothered about the possiblity of a Labour victory at the next election. I don't think either party knows what is the solution to our financial problems. Life is going to be tough in the UK as we re-adjust to a lower standard of living, whichever party wins the next election.

The Labour party has got us into this mess. Let them get us out of it. Let us see them squirm with a small majority in parliament after the next election.

Does David Cameron really want to win the next election. He can bide his time until the Labour party implodes somewhere between 2009 and 2014. Then we may see the end of this dreadful socialist party which has created so much havoc in this country.

Flossie

I have a modest suggestion. Government expenditure at 35% of the Country's turnover is mostly in wages. And around half of those employed by the government are in administrative jobs, as opposed to 'front-line' staff.

So, put all of the government's admin staff on a 4-day week.

This would allow a 10% reduction in all taxes. And as an effective 10% payrise for all businesses and individuals, it would stimulate needed growth across the whole of the economy...

And if growth resumes at around 3% per annum, then the admin staff can then resume full employment in about 2 years as the tax-take recovers back by 10%.

- This will require no borrowing.
- It will show solidarity with those who are going to lose their jobs altogether
- In times of downturn, companies cut their overheads .. so why not 'the state' too?
- As the current mess has been caused by a failure of regulation, then those responsible are seen to be suffering some of the consequences.

I commend it to our politicians as a sound, essentially zero-cost policy.

David Parker

Adjustments in VAT rates are not an option for either Brown or Cameron, since VAT is an exclusively EU competence. Certainly they can go to the EU (on bended knee) and ask for permission to make changes in our VAT rates, but there is no guarantee that the EU will agree to this, and certainly not within the necessary timescale.

Are both of these Polly-ticians unaware of this or are they just equally dishonest?

Peter Wilson

Ken Clarke is one of the most pro-EU advocates within the Conservatives and if I recall correctly he voted against a referendum on the EU treaty.

So for Ken Clarke to argue for a change in VAT rates, which can’t be done because it comes under EU rule, is either supreme ignorance on his part or a deliberate deception to avoid telling the British public how much the EU rules our lives.

TGF UKIP

Bit pointless of Matthew Paris talking about what may or may not be happening come August, Gordon will have gone to the country long before then.

So far as the Coffee House's perverse (perverted?) love affair with Ken Clarke is concerned, does it never occur just how much The Mouth did and does, via the media, to confuse and damage the Tory message on an almost daily basis.

My loathing of the Cameron Tories is no secret so I enjoy Ken's every appearance on the media so why you lot seem to so embrace him really is a complete mystery.

Jim

Flossie.

A brilliant idea. Why not put them on a 1 day week and see if we notice any difference?

Dan

Look like Samantha is right - according to the Telegraph Darling is going to announce a temporary cut in VAT from 17.5 to 15 per cent.
Clarke will be cited with relish by Labour in support of their tax policy, in doing so negating his potential use to the Tories as an 'attack-dog'.

perdix

Clarke said "if a stimulus could be afforded" a cut in VAT would be simple and effective. However, can it be afforded?

Andy W

Cutting VAT by 2% will do nothing in an environment where 20+% discounts are being given. Just creates an opportunity to hike it above 17.5% at a later date.
IMHO they should re-introduce MIRAS.
It would help in mortgage repayments, help some repossessions, pump cash into the economy & help the building industry.
Also defer VAT payments (or part of) for small businesses for 1 or 2 quarters to aid cash flow.