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The Tory deceit of VAT and the ‘Jobs Tax’: Ask a straight question, don’t get a straight answer



Andrew Marr interviewed David Cameron on his show broadcast live on the morning of  9th January 2011. Recently, people have been beginning to mutter very loudly how deceitful David Cameron and Nick Clegg have been in framing their explanation of the UK economy – and especially the ‘jobs tax’.

This excerpt is a shining example of David Cameron’s evasive nature in answering a simple question, such that you have unfortunately forgotten the question by the time you’ve got to the end of the answer.

http://www.bbc.co.uk/iplayer/episode/b00xmh5g/The_Andrew_Marr_Show_09_01_2011/

(begins at 35:40; ends at 37:10)

Andrew Marr:

You’ve mentioned jobs several times there. You must have had an estimate from your own Office for Budget Responsibility about the ‘jobs effect’ of the VAT rise to 20%. Roughly speaking, how many people are going to lose their jobs because of that?

David Cameron:

Oh look – look, of course, putting up VAT or any tax has an impact on the economy. You have to ask yourself the question – what would be the impact of not dealing with the deficit? We wouldn’t be sitting here talking about growth and jobs, we’d be sitting here saying, ‘you’re in opposition, sitting in a hole like Ireland, like Greece, and you’ve got the IMF knocking at your door. You’ve got credit downgrades, your interest rates are piling up, confidence is sapping out of the economy, the economy…

Andrew Marr:

Sure, but ..

David Cameron:

No, but this is very important. Any tax rise has an impact on economic growth, I can’t deny that for a minute. Economic forecasts are now done independently by the Office for Budget Responsibility. But you have to ask the question, what if you weren’t dealing with the deficit, which would be (I think) economic madness, and the second question you have to ask is, if you don’t do VAT, what tax would you do? The first category there would probably be National Insurance, that’s what Labour have committed to, and putting up National Insurance, as I’ve said, when you’re trying to get the economy growing and get jobs growing would be a very very perverse thing to do.”

Andrew Marr:

And nonetheless, [VAT] is a regressive tax. You yourself have said VAT is a regressive tax. Is it at 20% there for the long haul; there for good?

You can see at this point Marr simply waving the white flag after an exhausting non-answer.

A simpler explanation is provided by Stuart Adams, Institute of Fiscal Studies’ senior research economist, who has told Cathy Newman’s FactCheck that:

“VAT tends to weaken work incentives much like income tax or national insurance would. Rather than reducing the amount of take home pay that you can get for working an extra hour it reduces the amount you can buy with your take home pay. So VAT acts as a tax on jobs if you like – just like Income Tax and National Insurance do.”

Source: Channel 4 website

http://blogs.channel4.com/factcheck/factcheck-is-a-vat-hike-better-than-a-rise-in-ni-or-income-tax/5438

However, this is only part of the story. Indeed, estimates vary widely on the effect VAT has on jobs, from minimal to a lot. However, one aspect is definite – to miss out of the discussion altogether, as George Osborne and David Osborne have desperately tried to do in spinning their ‘jobs tax’ Tory Story, is grossly deceitful.

Shibley Rahman’s regular political blog is at http://shibleyrahman.com

James Naughtie summed up what I feel about the BBC – here's the clip!



Relive the moment! It couldn’t have happened to two nicer blokes, Jeremy Hunt MP and James Naughtie, but it sums up exactly what I feel about the smeartastic BBC.

I am glad James Naughtie is doing his best to raise the happiness index of the UK. The slow car crash in full is here.

But lightning never strikes twice? Well…..!

Happy xmas.

Some broadsheet journalists indeed deserve a very bad press



The arrogance and self-opinionated, badly-evidenced, garbage of some broadsheet journalists beggars belief. I should like to keep Mary Riddell out of this, whose article on the branding of David Cameron I think was the best piece of journalism this year, and Polly Toynbee, whose views on social democracy are far stronger than me but whose articles are always erudite and thought-provoking. Provoking I suppose is another word for the other end of broadsheet Fleet Street, such as Victoria Coren and Paul Waugh, whose ramblings seem insightful prima facie, but actually border on prejudiced and imbalanced on frequent occasion: more inciteful than insightful. Please don’t get me wrong; there’s a lot of brilliant investigative journalism done by the red tops and others, which enriches the accountability of people in power and influence.

I suppose my wrath was first incurred by Andy Marr’s latest contribution in the Guardian:

“The BBC’s website has nearly 100 blogs and invites its readers to “have your say” on an enormous range of topics, from Westminster to the weather.

But one of the corporation’s most familiar faces, Andrew Marr, has dismissed bloggers as “inadequate, pimpled and single”, and citizen journalism as the “spewings and rantings of very drunk people late at night”.

Marr, the BBC’s former political editor who now presents BBC1’s flagship Sunday morning show, said: “Most citizen journalism strikes me as nothing to do with journalism at all.

“A lot of bloggers seem to be socially inadequate, pimpled, single, slightly seedy, bald, cauliflower-nosed young men sitting in their mother’s basements and ranting. They are very angry people,” he told the Cheltenham Literary Festival. “OK – the country is full of very angry people. Many of us are angry people at times. Some of us are angry and drunk”.

For Andy Marr, this surely is a case of “don’t bite the hand that feeds you”. The relationship between blogging and the mainstream press has recently surfaced, for example at the top of the Gherkin.

Could it possibly be that the only reason that Andy Marr feels so bitter about blogs is that he has trouble in getting superinjunctions of them? Meanwhile, top blogger Iain Dale makes a very valid point that the news about William Hague MP was not ‘mainstream’ until the Foreign Office had issued a statement on it, and that was only because Guido Fawkes had successfully raised the issue in the blogosphere. I remember the abuse on Twitter thrown at Andy Marr by my Labour friends and colleagues when he mooted with Gordon Brown the notion that he was on the anti-depressant. His sources? I can find no mainstream source of this, prior to the blogosphere. My Tory friends have been making much hay of this, as if it’s a very central public isssue. It really is not – people should not stigmatise mentally ill people who lead successful lives, in much the same way that homosexuals go about their business in professional life with enormous skill and ability.

Broadsheet journalists should not have the monopoly of informed opinion. They incessantly go on about the disabled and bankers, like Mary Riddell did today. However, as a disabled person, I would like my views to be taken account. For that matter, as a person who has six real degrees to a high level in both undergraduate studies and postgraduate studies, I have well informed opinions about the graduate tax and student finance in general. For example, I have an opinion about ‘making people pay back more’, given that I personally have not been in salaried employment since 2006, which is an enormous strain for me and my parents with whom I live in Primrose Hill. I don’t want to read journalists pontificating about this everyday – but let’s face it this is how they sell copy. Likewise, when I was in medicine, I don’t remember people asking underpaid immigrant nurses for their views about living in a more globalised UK, and the thorny issues of insecurity, aspiration, and fairness. Get out of your ivory towers. I am disabled. I live in the real world, with only my disability living allowance as a regular source of income. I find your articles patronising, and it’s obvious you haven’t spoken to the people involved? Talk to the bankers whom you intend to impose your levy on, but for heaven’s sake keep discussion of them outside discussion of me (the disabled). I understand totally, however, your predicament of considering us ‘in the round’ as we are all part of the Big Society, notionally, but our problems are different to theirs!

Dr Shibley Rahman

Queen’s Scholar, BA (1st.), MA, MB, BChir, PhD, MRCP(UK), LLB(Hons.), FRSA
Director of Law and Medicine Limited
Member of the Fabian Society and Associate of the Institute of Directors

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