Ed Balls urges emergency tax cut to boost economy

[Hopeless Romantic]

Shadow chancellor Ed Balls is to call for a temporary emergency cut in VAT to stimulate the economy and boost consumer confidence.

In a major speech outlining Labour's economic policy, he will say acting now to counter the slowdown is a better option than just "hoping for the best".

He will also warn slow growth could "permanently dent" future prosperity.

The Conservatives said Mr Balls had not come up with a "credible alternative" for tackling the deficit.

http://www.bbc.co.uk/news/uk-politics-13787108

[Jeneral2885]

1. Right and how is Harman

goign to get enough out for a her 0.7% on GDP for ODA spending?

[T_i_B]

2. Short term borrowing

Same as for other spending departments, which does not help the deficit problem in the short term.

I for one would love a VAT cut (preferably a permanent one), but any plan to cut VAT may well need other taxes to be raised to pay for it as well. Hopefully taxes that hit the rich more, as opposed to VAT which hits the poorest hardest.

[tjwmason]

3. I think that VAT could do with a significant review

Despite being theoretically targetted towards more luxury good rather than necessities it is still significantly regressive.

[Hopeless Romantic]

5. Agreed. Ludicrous that shoes attract the same rate as diamonds

[Jeneral2885]

4. The Darling cut didnt work

will the Balls one work

[T_i_B]

6. Disagree about the Darling cut

It had a small degree of success. At the time the Pound was tanking really badly so it helped to lessen the effect of the Pounds sudden drop on consumer prices.

Bear in mind how much of what we buy is imported. You'd have noticed higher prices on most goods without that VAT cut. It wasn't a cure all but it made things slightly less worse at what was (and remains quite frankly) a very bad time for the UK economy.

[Jeneral2885]

7. Back then

was the height of the crisis. The cut created too small a boost anyway. Now, with external inflation rising, the cut may work but has to be stated how much and for how long