As James indicated earlier, the problem for Brown is that his VAT cut just won’t get noticed (and that the eventual rise in VAT – to 22.5 percent? – will be). That’s why you can expect the rejuvenated Labour spin operation to work overtime trying to make it look like the measure’s curing all our economic ills. How might they go about it? I wouldn’t be surprised to see a near repeat of Brown’s “working to lower oil prices” message from earlier this year. Then, he chatted with some Saudi princes, made a big show of it, and – hey presto! – oil prices started to fall dramatically. Of course, the fall was nothing to do with Brown. Oil prices were starting to drop anyway, because of reduced demand for oil during a recession. Our Dear Leader just hopped on to this falling trend, and claimed credit for it.
How would it work this time around? Well, the falling trend this time is inflation (see Fraser’s blog here). Prices are going to stop rising so quickly or, in some cases, possibly even come down – and that’s before any measure that Brown’s taking. But most news outlets don’t report these forecasts; leaving room for Our Dear Leader to sneak in with a new “working to make things more affordable – that’s why we cut VAT” message. And – hey presto! – things will get more affordable. Of course, it would be disingenuous to its core. VAT isn’t imposed on many of the goods that will be affected by falling inflation. But will that stop Brown taking credit? I doubt it. And it’s that credit-taking that the opposition parties will have to counter.
P.S. Cameron appeared on Marr earlier and said that he was “highly sceptical” of the VAT measures. Details here.
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