Okay, so, according to the Chancellor, the way that Britain is going to get through the recession is by asking the public, who he readily admits have far too much personal debt in the form of mortgages, unsecured loans and credit cards, to go out to the shops and spend even more.
Nice one – let’s rack up the personal debt mountain even more. Who knows, it might even match the national debt that this government has landed us with so that they can go out and spend more.
But then, this is a man who is still adamant that Britain is in a better position going into this recession than ‘comparable countries’, even though the IMF and the World Bank say we are in the worst position of any of the major western economies. Perhaps by ‘comparable countries’ he means ‘countries that are well and truly in the shit’.
This idea of the public spending us out of recession is the reason (or so he says) for the 2.5% cut in VAT. But that rather naive assumption is based on the shops actually passing on the cut. As I said yesterday, if I were a shop keeper and had the choice between wasting time and money changing all my prices or pocketing the tax giveaway for my own profits, I know which I’d do. But then I’m a cynic.
I’m also quite bitter and annoyed by the tax cut. It’s a cut you won’t see any benefit from unless you go out and spend (assuming the shops… Oh, you know) and even then, £1.10 off a £50 item is hardly Earth-shattering. But it’s also created a whole bunch of work for me. This morning I’ve wasted time debating with my directors how this should be implemented, leading to one of them saying “This is crazy, every firm in the country is wasting time and money having the same discussion today. It’s madness.”
And this weekend, I’ll have to waste even more time going through all our invoice and completion statement templates and changing all the settings in our accounts software, ready for next Monday’s change.
Why on earth we couldn’t have had a penny, or even half a penny, in the pound reduction in income tax, I’ll never know.
And then there is the looming prospect of tax rises if Labour win the next election. Actually, that’s not a big worry since they won’t win the next election.
Okay, sorry, rant over. I’ll go away and do some accounting now. Or maybe I’ll try and write a sneaky few hundred words on my WIP instead.