VAT, VAT, VAT – but what’s this? The main headline on today’s FT doesn’t mention the sales tax at all, and the piece below it only does so in passing. Instead, a declaration that “UK austerity measures [are]
expected to pay off,” based on a survey of economists conducted by the paper. Although those polled have concerns about inflation and the eurozone, only 13 percent say that George Osborne
needs a Plan B for dealing with the public finances.
As always, we shouldn’t place too much stock in this kind of thing. Some economists will back the coalition, others will back Labour; some will be right, others will be wrong. But, today of all days, the coalition will appreciate a presentational leg-up such as this. “Tough but necessary,” is the message that they are broadcasting about the VAT hike. “Tough but necessary,” is the message flaring off the front cover of the pink’un.
It also segues neatly into Tim Montgomerie’s post on how the Conservatives can go about winning the next election. He plots a five-point strategy, of which the first strand – growth – is the most important. If the economists are right, and the coalition can engineer sustained and substantial economic growth, then today’s struggles over this tax hike or that spending cut will likely fade into the forgotten past. If not, then the same struggles will come to define the next election.
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