Wednesday, 14 May 2014

Labour say VAT has been risen to 31.5% ... and they want to run the Economy!

Today we heard the news that unemployment is down, yet again, that employment has increased, yet again, and that claimant count is down, yet again. The more we hear the economy is well on the way to a sustainable recovery the more out of touch the well worn sound bite "cost of living crisis" sounds irrelevant and out moded. Labour are failing astonishingly where Margaret Thatcher succeeded so spectacularly. They are trying to say it costs more to do your groceries due to Government economic policy. With inflation well under control and wages now rising faster then inflation this is simply wrong. Labour's Douglas Alexander on BBC's Sunday Politics showed just how shambolic their attack on the Government's economic record really is. They claim, in the now infamous peas in a pod poster, that the VAT rise has put £450 on your shopping bill. Ignoring for a moment that most of the food in the poster is VAT exempt, the £450 seemed an awfully high figure. when challenged Danny Alexander explained that this was over the 4 years since the rate rise ... but he was mistaken and corrected by the shadow chancellor, Ed Balls, himself. He confirmed during the broadcast the £450 is an annual cost. For this to be true the annual shopping bill would need to be £24,500 a year and that ALL this shopping is subject to VAT. If, for example, we spend a 1/3 of our pay on shopping then this would equate to a take home pay of almost £75,000. No wonder Labour keep banging on about a cost of living crisis. We can look at this another way. If the annual shopping bill came to a more realistic £5000, the only way you could arrive at £450 would be to remove all exemptions and raise VAT to 31.5% ... now that would be a crisis.