Douglas Carswell's Blog

VAT hikes help offset all those extra EU payments

Today is the day that VAT rises to 20 per cent. More or less every time you buy something (with the exception of food and some other items), you’ll have to give the state a fifth of the value of the transaction. 

Even with a new growth Tsar, I’m not sure how this will stimulate growth and create wealth.     

Some will tell us this is justified in the name of sound housekeeping. “Balancing the books”... “Cutting the deficit” .... “Just like Thatcher had to do” ...  

Perhaps. 

But I can’t help noticing that the extra revenue this VAT hike brings in is a sum that would more or less off set the extra amounts we have agreed to pay over to the EU since May;   

Total extra revenue raised by VAT hike approximately = £ 13 Billion 

Total additional commitments to EU since General Election = £ 9 Billion*

Yes, folks. From today, your higher shopping bills will in effect be paying for Baroness Ashton’s swanky new EU External Action Service offices in Brussels, rather than your local NHS or police force. 

Without all the extra EU payments, perhaps we could have funded public services without quite such a VAT hike?   

Some in Westminster are keen to say that the economy, not Euro detail, must be the focus of attention for the year ahead. Absolutely. 

But maybe the lesson of the past year is that if you don’t get Europe policy right, you end up with little choice but to raise VAT when the economy is already fragile. Fail to master the EU small print, and you can’t actually have the low tax / low regulation growth strategy we need – even when eventually you start talking about it.

* - Year-on-year rise in EU budget contribution of approximately £2 Billion, plus the Euro bailout liabilities of approximately £7 Billion = £9 Billion.

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