Posts Tagged ‘VAT bombshell’

Osborne’s regressive VAT bombshell is both mad & bad

25/11/2010, 07:00:35 AM

by Sally Bercow

There was certainly no age-of-austerity angst or belt-tightening blues in evidence at the big blue and yellow box in Wembley earlier this week. Ikea was rammed – not just the downstairs marketplace with its Xmas decorations, tealights and festive bits and bobs – but the entire store. Consumer confidence may be falling (the Nationwide index now sits at its lowest level since March 2009) but there were more people sprawling on Klippan sofas, bustling by Billy bookcases, bouncing on Sultan mattresses and measuring up Faktum kitchens than you could shake a stick at.

Now, of course, I appreciate that Ikea is almost always busy, not to mention nightmarishly stressful (all couples argue in Ikea right)? Nonetheless, the member of staff I (eventually) found agreed that there were even more shoppers than usual. More interestingly, he divulged (after only one leading question and the teeniest amount of prompting) a theory as to why: namely, that people are enjoying one last hurrah; a final spending splurge before the VAT increase hits in January.

What is more, this is borne out across the high street: although John Lewis last week reported a booming 6.8 per cent increase in sales on the same time last year, their MD, Andy Street, observed: “The imminent VAT increase is a major issue. We are seeing customers already talking to us about bringing forward big home purchases, such as carpets and kitchens, before the VAT increase and who can blame them frankly”. (more…)

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Ed Balls on the budget from hell

22/06/2010, 05:24:17 PM

For millions of families, this is the budget from hell. The combination of a sharp and unfair rise in VAT, the callous freezing of child benefit and the deepest cuts our public services have ever seen will be a hammer-blow to lower and middle income families.

Not only is this an unemployment budget which will see the jobless total rise by 100,000 a year, but George Osborne has also raised the only tax – VAT – that all the unemployed pay – and pensioners too. (more…)

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