It seems that the Labour party is all out of ideas as to how to solve the economic crisis that we’re in at the moment, so all we are hearing from ‘iTalk’ Balls is how we need to cut VAT to get the economy moving.
Trouble is that Balls and Milibland seem to have short term memory problems when it comes to this approach because they seem to have forgotten that they tried it once before when VAT was cut temporarily from 17.5% to 15%. It didn’t work then, but he seems to be convinced that it will work now and I can’t figure out quite why?
Balls believes that cutting VAT from 20% back to 17.5% will give the UK economy a real boost. He likes to point out – in carefuly chosen words – that when Labour cut VAT it resulted in the deficit “coming in £21 billion lower than expected”
Note that Balls did not say that that’s £21 billion lower than the enormous increase that they miscalculated in the first place. Also note that Balls has not given us any indication as to how this tax cut would be funded. Perhaps an increase in landing fees for flying pigs, or a license fee for shooting pie in the sky?…
It seems to me that Labour has learnt nothing much from its 13 years in power and in particular for the disastrous years of the Brown government. You can’t spend your way of a recession and you can’t make tax cuts without rasing the money from somewhere else or by cutting spending.
Either Mr Balls has something quietly tucked away up his sleeve, or he simply can’t add up…
…or maybe he just realises that when you’re in opposition you can promiss anything you like – because you know you don’t have to deliver it.