VAT cut not the answer (Exeter Liberal Democrats)

Exeter Liberal Democrats <info@exeterlibdems.org.uk>

VAT cut not the answer

November 24, 2008 9:00 AM

Liberal Democrat Prospective Parliamentary Candidate for Exeter Graham Oakes has described the proposed temporary cut as "missing the target" and calls for a cut in Income Tax.

"The proposal to temporarily reduce VAT fails bring relief to families struggling to pay utility and fuel bills as these are already at the 5% minimum and it also fails to help families buy food or children's clothing."

"Assuming this reduction is across the board it will might help the construction industry which is the hardest hit sector of our economy, but any good it does helping both create & safeguard jobs is undermined by the increase in National Insurance payments."

"I am also concerned that so far the only measure identified to fund this is a new tax rate for those earning over £150,000 and even that is delayed until 2011. If he isn't careful the Chancellor will create medium and long term problems to solve the ones we face today."

"The Chancellor needs to be both bold and transparent. Any measures should be fully funded by balanced tax increases, not simply sticking it on the government's credit card, in other words just borrowing the money."

"We should close the loopholes that allow some companies to avoid some taxes. We should reduce Income Tax, preferably by raising the starting point at which people start paying tax, thus helping the low paid the most and we should raise the tax levels for people earning over £100,000. These measures would stimulate the economy without massively increasing government borrowing, which will rise because of the economic cycle."

He also rejected the approach of the Conservatives to use reduced public spending and hence reduced borrowing to counter act the recession.

"This failed in the 1980's and millions of people lost their jobs and many thousands lost their homes. By reducing capital expenditure the construction industry will lose its biggest single customer, hurting both jobs and services. Another effect will be the reduction in road maintenance which will result in far higher bills in the future - a false economy."

"This switch of position is designed to distance themselves from the government to seek to gain some future political advantage, rather than putting the country first. All politicians should be working together in this crisis, putting forward ideas so that the best ones can be adopted. It is a shame that the Tories are no longer willing to do this."