A blog by Luke Akehurst about politics, elections, and the Labour Party - With subtitles for the Hard of Left. Just for the record: all the views expressed here are entirely personal and do not necessarily represent the positions of any organisations I am a member of.

Tuesday, November 25, 2008

Change the Tories don't believe in

Only a couple of weeks ago we had the ridiculous spectacle of David Cameron trying to jump on the Obama "change" bandwagon at PMQs.

Has anyone told the Tories that Obama's economic policy is, like Alistair Darling's, to use a massive fiscal stimulus to try to reduce the impact of the recession?

Change you can believe in. Except the Tories don't believe in it. The US President they take their economic cue on how to respond to a downturn from is Herbert Hoover.

11 Comments:

Blogger Merseymike said...

The Tory solution would turn recession into British depression.

Monetarism didn't work then and it won't work now.

12:03 pm, November 25, 2008

 
Blogger Newmania said...

Ooo is it can we expect a sizeable tax cut for 90% of the population then

No?

Well well theres a suprise an old Scottish red socialist turns out not to be like any US politician at all and would be laughing stock if he as much as opened his gob in the land of the free.

Get it in context Luke we have been defending the US against the non stop attaces of your appeasing little chums for years and with no help !

12:15 pm, November 25, 2008

 
Blogger Newmania said...

Errr Luke what happened to your brilliant post about VAT ?

12:32 pm, November 25, 2008

 
Blogger Luke Akehurst said...

I deleted it when I was realised I was talking gibberish because VAT on business to business transactions is reclaimable.

Yours idiotically,

Luke

12:36 pm, November 25, 2008

 
Blogger Newmania said...

Yeeees , I liked the comments as well..

:)

12:47 pm, November 25, 2008

 
Anonymous Anonymous said...

So what happened to your next post?

It's not possible to delete something once on the internet.

For the benefit of everyone else:
--------------------------
Missing the point on VAT
by Luke Akehurst
Most of the media coverage of the cut in VAT concentrates on the impact on consumers paying it on retail goods, and whether a 2.5% saving will make enough difference to spending behaviour to have an impact on the wider economy.

But this misses the point. The real impact of the VAT decrease will be way back down the industrial chain in "business-to-business" VAT and will be huge. Not only does the price of a car in a car show room go down because the VAT on the finished product is lower, but the car manufacturer also pays 2.5% less VAT on the tyres they buy from the tyre maker, the seat they buy from the seat maker, the steel they buy from the steel company. These folks in turn are paying 2.5% less VAT on the components they need, and the machinery and tools and plant they need to manufacture with. If they are buying services, e.g. cleaning contractors to clean their factory, or even PR consultancy, they are paying less VAT on it.

On business-to-business contracts worth millions, for every million spent the VAT has gone down by £25,000. Each £25,000 saved is a job that won't get cut, or £25,000 that can be passed on to the end consumer in more price cuts to keep products competitive, or reinvested in ways that generate more jobs.

1:59 pm, November 25, 2008

 
Anonymous John said...

Obama's policy is lots better than ours. The Tories is substantially worse than both, however!

2:47 pm, November 25, 2008

 
Blogger Newmania said...

Luke was not as wrong as he thinks he was . In a manufacturing process value is added so more VAT would be charged than paid.

3:29 pm, November 25, 2008

 
Anonymous Rich said...

The fact is there is no solution to the current economic mess. Economic stimulus means that the downturn will last longer than it should and therefore making the UK less competitive in the longterm.

This should have not been allowed to happen in the first place and is simply the result of having politicians who are probably less qualified to run the country than me and you. What on earth would a historian, which both Brown and Osbourne are....know about economics and banking.

Politicians are proving themselves to be useless sheep and don't deserve the trappings they award themselves.

In 5 years time this country will have to dramatically cut public spending. This will probably mean slashing NHS budgets and cutting back on front line services all because this government really thinks it can spend its way out a housing boom led recession. The reason I say this is that there is no evidence that tax receipts can support the current spend and return public finances to order.

While I fully support a tax increase for the rich the wreckless tax cuts to get people spending is simply brushing our ecomomic problems away to be discovered at a later date.

Getting people shopping and spending their reserves in this current climate is simply asking for problems. People need to be saving and putting money away in case they lose their jobs.

As for the post on business to business contracts...simply not the case. The construction industry involved with new build........is VAt exempt. Lots of companies such as mine pre pay VAT at 10% negotiated with the tax man....so we lose out big time.

My dad who ran our company for over 50 years told me this week he has never witnessed conditions as bad as this. I'm back on the tools again and we have shed staff this week as we have no choice....due to the Halifax cutting our overdraft.

11:14 pm, November 25, 2008

 
Blogger Merseymike said...

Part of the problem with housing is that the south-east is overheated and rather than move jobs to people, people have been moved to jobs. meaning more housing in the south east and growth areas like Cambridgeshire, whereas there are plenty of available houses elsewhere. I'd rather see less housebuilding and concentration on regeneration of existing housing and areas.

11:18 pm, November 25, 2008

 
Anonymous Rich said...

We don't actually need to build anymore houses. There are whole estates in the midlands just begging to be turned into family homes but due to their run down nature....no one wants to risk money on them. Knock them down and start again and do something brave and new.....and no more flats.

I'm a great believer of building homes fit for families that include gardens, safe streets and parks. Not cheap thrown up housing that turn into ghettos.

I really wish we could get people to build their own homes using loans from the nationalized banks. There are some award winning projects where people have build their own home for as little as £40,000 and that includes the land.

It all comes down to money though something the UK has very little of at the moment.

11:45 pm, November 25, 2008

 

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