Tuesday, 29 December 2009

Is Iain Dale Hinting At Cameron's "Fairness"?

Of course you probably wouldn't be a Lib Dem blogger, or a regular reader of Lib Dem blogs and escaped the news of David Cameron's love bomb New Year Message.

We there is an interesting possible proviso of what may lie ahead in Iain Dale's blog. In his ten predictions for 2010 he predicts that:

"VAT will go up to 20% at some point this year"

Now that is an interesting statement for someone who has recently looked at becoming a Conservative candidate. There are only three possible occasions that VAT could be raised next year, after it goes up on January 1st that is.

The first would be in the budget. The second would be if an incoming Conservative Chancellor wants to radically change things just after a splash and dash budget into General Election failure by Labour. The third would be in the Autumn Pre-Budget Report as Darling did last month.

So does this mean that the Tories are planning to lift the level of the regressive* VAT to 20%. Cameron is talking about fairness. The Lib Dems are promising to lift the income tax threshold closer to the level of the national minimum wage than any of the other main parties is prepared to go. The Lib Dems also recognise that VAT hurts most those on the lowest incomes. The raise in VAT would be vintage conservatism. Its very nature of being the same on all goods means that their wealthy donors don't feel that they are being hard done by.

But historically look at who has made the increases in VAT.

In Geoffrey Howe's first budget for Margaret Thatcher in 1979 the Tories almost doubled the standard rate from 8% to 15%, even the higher rate before then was only 12.5%. The only other Chancellor to take VAT to new heights was John Major in his 1991 budget taking it the 17.5% level. The Major increase was to help fund for a cut in that other regressive tax the Poll Tax, robbing Peter to pay Paul. Darling's cut in 2008 was only a temporary measure one which he felt would act as a stimulus.

Cameron as I said yesterday likes to think that we are more in common, but I don't think there is anything in common about how to raise the Government's finances in a fair way, which is kind of a major issue.

Embarrassing Update: No sooner do I post about the difference's between Lib Dems and Conservative than Sara Bedford points out one of our MP is following in an Anatidae nature.

* Yeah that was even my initial reaction as I live blogged the pre-budget report.


  1. Oh, Stephen, how you disappoint me! I come to you expecting a genuine, well-considered argument and instead, I get another little Tory-smear. Why don't you just jump onto the Labour bandwagon and start bringing up "the Toff issue"?

    The harsh reality is that the world is suddenly costing more than it did before (damn... if only we had half of the empire still working for less than minimum-wage), and whomever finds themselves in power will account for that.


  2. Alexander it was David Cameron who called for a clean fight leading into a general election. A fight over policies he has largely yet to reveal what is going on.

    I know that the world is suddenly costing us more, but the Tories appear to be making those who can least afford to pay an abnormal share of the responsibility. Labour if the details of Brown's new year message is anything to go by are living in cloud cuckoo land.

    I didn't bring up the toff issue regarding taxation. The Tories are looking at freezing public sector pay even of those below average earnings, down o £20k. If they are going to raise VAT that is another impact on those on low incomes. What tax break have they announced, one on inheritance tax that will only affect the super rich. (Yet somehow Cameron wants us to believe in a caring conservatism)