To me this is very important, will affect each and everyone of us. Rich or poor. Probably poor more so as they have little disposable income anyway to start with. But i know we have all the student tuitian fees debarcle which i have blogged time after time on but this will be the next bomb shell the condems will land on us for sure.
Vat from January will be rising from its current position of 17.5% to 20%. That extra few percent could tip things over the edge for people. NOt only will this cripple consumer spending confidence it will also have an affect with putting business's out of business as they tryt o compete with added pressures of putting up VAT.
The last Labour government dropped the VAT percent down to 15%. This did little to the naked eye it seemed but it did boost spending for a little bit. Combined with schemes like teh car scrapage scheme and the boiler scrapage schemes this helped a bit of growth appear in the economy.
The choice of the coalition to raise this figure to 20% will not help consumer spending confidence and will hurt a lot of people most motably the poorest in society who struggle to make ends meet as it is.
I am fully aware that if labour had been in power now they also wantedto put up VAT. This was one of Alastair Darlings plans. I feel both parties who are and would have been in power are wrong and lowering tax's at this time on goods that are essential woudl help people out a bit and lessen the squeeze that there is on people right now.
The rise in VAT will again hit families the hardest i feel as they have the biggest weekly outgoings with feeding a family of 4 for example. Food and petrol prices are already going up alarmingly quickly and this will only further put people under the strain.
I just thought i'd throw the VAT debate back into the ring as over christmas and the holidays people better make the most of the rate of VAT as it will go up in January as i have outlined above.