Wednesday, 29 April 2015

What The Tories Aren't Telling You

David Cameron has today announced that a Tory Government would not increase VAT or National Insurance, until after 2020, and they would legislate to tie the hands of a future Chancellor to ensure it. What they aren't telling you is that in 1999, William Hague, came up with a similar hair-brained scheme, to legislate that they would bring about a year by year reduction in the tax take, and had to abandon it. Other Tories pointed out that if conditions changed, it would be madness to have tied the hands of the Chancellor to respond.

What they also aren't telling you is that the Tories have made promises before elections in the past, simply in order to win, and then dropped them after getting into office. They have done that repeatedly over VAT. Nothing would be easier than for the Tories to abandon such a promise after the election. After all, its impossible for the Tories to win an outright majority, and they have clearly been running a good cop/bad cop routine with the Liberal wing of the Liberal-Tory party, and that Liberal wing have their own “track record” of reneging on promises too.

Whenever the Tories have been asked where this or that huge sum of money is to come from to meet their frantically announced unfunded spending pledges, they have simply responded “look at our track record”, as though its possible to know how they are going to get from Stoke to London, by looking at how they got from Glasgow to Stoke! But, what the Tories aren't telling you, is that if we do look at their track record, it gives no reason for confidence that they would do what they say. They said they would wipe out the budget deficit by 2015, but they have only reduced it by a third, and only half as a percentage of GDP. The reason is that their insane policy of economic austerity, cratered the economy, stopped the growth that was occurring, in 2010, in its tracks, and thereby reduced the potential tax revenue that was needed to clear the deficit.

If we look at their record, it has been that every time they have said they would not raise VAT, once in office they have done just that. But, its also clear that despite all the fake arguments between the Clegg Liberals and the Cameron Tories, the strategy of both is to recreate the Liberal-Tory government that has so damaged the economy and the social fabric of society over the last five years. There is in reality more real difference between the UKIP wing of the Tory Party and the Cameron wing, than there is between Cameron and Clegg.  Just as the Liberals abandoned their opposition to Tuition Fees, in 2010, and voted through a trebling of them, on the basis of the need to compromise, so Cameron would immediately ditch the promise to freeze VAT and National Insurance as part of the deal they will strike with the Liberals to keep themselves in office.

What the Tories aren't telling you is that they could even keep their promise not to raise VAT rates, and yet still increase VAT, and other purchase taxes. The evidence is that over 20%, increases in VAT tend to be counter-productive, but there are lots of things on which VAT is not currently levied, or on which its levied at a zero rate, etc.  Remember the “Pasty Tax”. The Tories could avoid the chaos that caused by simply levying 20% VAT on all food, and then there are lots of other commodities that could have VAT slapped on them at 20%. The government list here shows just how many goods and services there are that are currently exempt or on which VAT is currently only levied at 5% etc. - HMRC VAT Rates.

But, they could also increase duties on goods, which has the same effect as a rise in VAT. With oil prices having fallen dramatically, they could even carry out the promise they made, before the last election, which they abandoned, which was to increase fuel duty when oil prices fell.

All of that is on top of all the other things that the Tories aren't telling you, despite having been openly questioned about them on multitudinous occasions. Where do they intend to get the £12 billion of welfare cuts they have announced, unless they hit the benefits of the disabled, for example, or by hitting all of those in work benefits on which millions of low paid workers depend, not to mention on which thousands of low paying employers and landlords depend? Where are they going to get the £7 billion of tax cuts for the rich they have announced, but for which they have provided no explanation of how its to be financed? Where are they going to get the £8 billion of additional funding for the NHS they have promised, but again given no explanation of where the money is to come from?

If we look at their track record, there is no reason why we should put any faith in the Liberal-Tories. The only thing we can have confidence in is that they will inflict more damage on the economy, and more pain and suffering on everyone other than the rich.

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