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The poster isn’t the problem

Posted on May 13, 2014 by

Labour’s Douglas Alexander got himself in a right old pickle this weekend, at first claiming that the party’s new campaign around a poster about VAT referred to an annual bill of £450 for the average family, but then trying to backtrack in a panic and claim the sum was calculated over the entire period of the coalition government when it was pointed out to him that the figure was ludicrous.

vatposter

Wings Over Scotland is of course dedicated above all to keeping the record straight, so our sinister network of shadowy cyber-agents got straight onto the case.

It wasn’t the most demanding of assignments.

“While the Government is giving the banks a tax cut this year, the VAT rise has hit families hard – costing a couple with kids around £450 per year.” (Cathy Jamieson, shadow economic secretary to the Treasury)

“A family with children earning £20,000 still loses £253 a year from this April as a result of the government’s other cuts to things like tax credits and child benefit. That’s on top of the VAT rise which is costing families an average £450 a year.” (Rachel Reeves, shadow work and pensions secretary)

“Families with children will lose an average of £511 a year from changes to tax, benefits and tax credits being introduced from tomorrow, according to new figures from the Institute for Fiscal Studies being highlighted by Labour today.

The analysis follows last month’s Budget and is on top of tax rises already introduced, like last year’s VAT rise which is costing a family with children an average of £450 per year.” (Ed Balls, shadow Chancellor of the Exchequer)

The Chancellor already raised VAT to 20% in 2011 and this is costing families with children an average of £450 a year.” (Owen Smith, MP for Pontypridd and shadow Treasury minister)

Families are already suffering from  last year’s VAT rise which is costing a family with children an average of £450 per year and these cuts will pile on even more misery during difficult times.” (Barbara Keeley, MP for Worsley and Eccles South)

A family with children earning just £20,000 will lose £253 a year from this April, on top of the VAT rise which is costing a family an average of £450 per year.” (Andrew Gwynne, MP for Denton and Reddish)

The clanger has attracted considerable media attention, with a Labour spokesman quoted in numerous newspapers giving a very curiously-phrased statement:

“David Cameron and Nick Clegg are desperately trying to deflect from the truth of their VAT bombshell. Their decision to increase VAT has added £450 to family bills over the year, on the Treasury’s own figures.”

“Over THE year”? What does that even mean? Which year are we talking about? Is it supposed to say “over A year”, or “over the yearS? It’s hard to escape the conclusion that the quote has been issued with that deliberate ambiguity in place in a desperate attempt to avoid digging the hole any deeper without just saying “No comment”.

Because the claim simply, obviously, isn’t true. A typical family has nothing LIKE £21,600 left a year after paying mortgage/rent, utility bills, food shopping and other non-VATable items. It couldn’t pay an extra £450 a year in VAT if it wanted to.

But what everyone’s missing is that the problem isn’t the poster – which DOESN’T say “per year”, and may well be accurate – but the lie Labour has been telling constantly since the VAT increase in 2011. All the poster has done is indirectly expose that lie.

And since Labour’s been brazenly telling the lie for over three years (and getting away with it), cynical readers might reasonably be forgiven for wondering what else the party might be being less than entirely truthful about.

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Taranaich

Labour: Hardworking Britain Better Off

God almighty, they’re even putting Tory slogans on their posters. How many event horizons are Labour going to crash through before people realise THEY ARE NOT THE PARTY YOUR FATHER/GRANDFATHER VOTED FOR.

Croompenstein

Oh what a tangled web they weave when first they practice to deceive.

Steph

Labour really need to get their act together. They’re now blatantly lying and the electorate is not going to fall for it much longer. Labour don’t stand a chance at the moment.

Dcanmore

Wrong Stu, Ed Miliband and his wife have £21,600 disposable income left after bills, he is the average family guy caught in the squeezed middle you know. That’s how they’ve calculated this figure, we’re all like him in these awful times.

Nick

Wouldn’t it be nice to have a politician, just once, say I got it wrong, I am sorry. Not after they have been hauled over the coals, not after the police have arrived to arrest them – not when they are caught out, but when they THEMSELVES first realise.

Like when Danny Alexander was caught mid sentence clearly making things up on the spot, STOP – say I am sorry I realise I
A) don’t understand the question
B) am just winging it here guys!
C) realise that the quote up there looks like a load of crap, but I was told to tow the party line.
D) stop hey what?

OR the other day when Johann Lamont was gently roasted over the Devo Nano fire. That was a right sing song that was!

Griminish

The facts are that VAT receipts have risen by about £10billion since the Conservatives came to power. With nearly 27million homes that is around £120 per annum per houshold. This figure includes growth in terms of extra items purchased due to the partial recovery. All that before we start to discuss the misleading graphic attached to the misleading data. If this was a product then I would expect advertising standards to investigate.

Every time Labour are conservative with the truth they destroy their own crediblity.

Desimond

Next week, Ed Miliband trumphantly claims he has single-handledly solved by off moaned about ‘Cost of Living Crisis’ by finally getting the correct VAT figures on a Casio SX-15 Calculator.

No-one cares.

Thomas William Dunlop

The want to run the country when they cannot even do simple arithmetic.

Another symtom of how incompetent Westminster politicians are, and how you can never expect them to wisely spend your money.

Thomas William Dunlop

I was going to go off and watch some “Thick of It” tonight, but why bother when you can just follow up this story and its unfolding car crash.

handclapping

They are missing the sure hand of Gordon as Chancellor

Bugger (the Panda)

@ Thomas William Dunlop

ref innumeracy

– and not for the first time.

See Broon, see Darling

nuf said

Oneironaut

I think what Labour are really angry about here is more along the lines of:

“Come on Cameron, you’re not even trying! We can hit them harder than that! They’ll be living in cardboard boxes in the gutter begging for mercy by the time we’re done with them!”

Really can’t wait till we get independence…

Murray McCallum

“UK households, on average, will be about £400 a year worse off, Budget documents suggest, with the poorest 10% losing £200 and the richest £1,800, although the poorest will be hit harder than most as a percentage of their income.”

link to bbc.co.uk Dated 22Jun’10

The £450 Labour figure looks suspiciously like the TOTAL impact of Osborne’s budget when he raised the standard VAT rate.

liz

Since presumably the calculations are done by civil servants on behalf of labour – are they allowed civil servants in opposition? – do you think they are being set up to take a fall – what with the promotion of UKIP on the BBC?

Is this revenge for interfering in too many pies?

I for one will not be sad to see the present Labour disappear into history and hopefully be reborn.

When you think about it they were only formed in 1900 and although they started with good intentions, I think they must have been infiltrated early on and are now a shadow of their original selves.

As for Cathie Jamieson – she resided over the mess that was the finger print dept when an ex-policewoman received a massive pay-out for being wrongly accused – I don’t think she ever apologised for that shambles.

Bugger (the Panda)

@ Murray McCallum

It is almost I am losing the will to live with these crap propaganda and own goals.

Time for Action Direct on the MSM?

lumatrix

No one here seems to get it. The Labour party were NOT lying about the £450 pa VAT figure – it’s MUCH worse than that. They are ALL utterly incompetent. Of course now that the lack of basic arithmetic skills(Note the Shadow Chancellor’s contribution here – and how scary is THAT?) is exposed any that repeat it ARE lying.

Think about it. What does an MP or MSP have to do to get elected? As a Tory, LibDem or Labour party member in Scotland they have to convince a number of fools to select them. Then they sit back and let a further number of fools vote for their party or them – job done – thousands of pounds pa and practically unlimited expenses – for what?

Being SO deeply stupid it’s hard for a normal person to comprehend their depth of ignorance?

Every voter in Scotland should be required to watch Holyrood once a week. How many would then vote for their current MSP? Not many I expect. I suggest that this is a tactic that could be useful against ‘NAY sayers’. Just ask them to watch Holyrood. Once should be enough.

As the ‘chosen one’ Rosa Kleb was an English teacher? Christ! – where did she get her degree? She’s incapable of USING English herself let alone teach it to others. Anyone voting for her after watching just ONE of her miserable performances proves their own stupidity beyond question.

Thomas William Dunlop

@Bugger (the Panda)

Don’t forget the rest-the tories and the LibDems, all grown fat on Westminster expenses. They behave like worst of the worst of the Ottoman empire.

There by the grace of patronage and nothing to do with ability. A whole legions of idiots, imbeciles and hanger-ons.

Surely we can do better than this?

fairiefromtheearth

Fekk sake cmon Rev liebour its in the name 😉

fairiefromtheearth

How anybody can vote for these lying scum is beyond me.

David S

Nice one Rev, another major lie exposed – though nice of Lab’s election ‘strategy masterminds’ to produce a nice poster to help you.
They’ve all been lying to us for so long now, they’re strangers to the truth.

Dan Huil

O/T Just heard Rory Stewart MP has been appointed as chair of Westminster’s defence select committee. So when he’s holding hands with his chums along Hadrian’s Wall he can think about the repositioning of Trident somewhere in England.

MochaChoca

The figure must have come from somewhere.

If the average Joe buys a new Mondeo every three years and fills it with fuel every fortnight a 2.5% VAT increase equates to about £200/yr just for that.

Brendan

Hang on , fellows, you are not thinking with Labour logic. The bankers, with their massive bonuses must be paying an extra £450 in VAT,and, we are ALL IN IT TOGETHER, ergo we are all paying an extra £450 in VAT. Simples!

Murray McCallum

The Labour position is very odd as they largely agree the Tory spending cuts (they actually wish to cut welfare further) and they have no plans to reverse the VAT rise.

So whatever figure Labour wish to put on people being worse off they have no concrete, documented plans to reverse it.

Peter Macbeastie

Ah, just wait for it.

Sooner or later WoS will be attacked by some eejit or another claiming you are defending Tory policies by attacking Labour.

Of course, we will all point and laugh and make suggestions that person would be best employed going back to their village and taking up their former role of idiot, for which they will be assumed to be best suited for.

Steve

link to theguardian.com Care to weigh in on this Stu? To me this is absolutely frightening, political parties using the police to try and censor social media.

Murray McCallum

“The VAT increase, which Mr Osborne said would raise £13bn a year, is to come into effect in January.”

26.4 million households (ONS 2013 UK households)

Gets you in the region of the Labour figure. The trouble is the £13 billion a year additional VAT would not all fall on the 26.4 million households.

heedtracker

link to theguardian.com BetterTogether Guardian knives are out too but it’s Balls they’re after now, which makes sense really. if it is Balls cooking UKOK VAT books like this, will he show his work over all his project fear stuff too? Let’s ask the BBC in Scotland.

Croompenstein

We can see it’s bollocks, the Swedish tourist can see it’s bollocks, WTF does it take to get the ‘vote Labour because my granda did’ to wake up and smell the bullshit..

big jock

Most if not all of the food in the advert is Zero VAT rated. Am I missing something!

link to customs.hmrc.gov.uk

TheItalianJob

Dan Huil says;

“O/T Just heard Rory Stewart MP has been appointed as chair of Westminster’s defence select committee. So when he’s holding hands with his chums along Hadrian’s Wall he can think about the repositioning of Trident somewhere in England.”

Brill. I’m still laughing and that’s 10 miutes now.

Cath

Labour are about to have done to it by the UK media exactly what they’ve revelled in the same UK media doing to independence supporters and the SNP. You’d have to have a heart of stone not to laugh.

Free Scotland

Stu, is there not one newspaper, not even one, that would publish your copy on this in exchange for a full-page ad for WoS?

Croompenstein

I’m away oot to use my shopping basket to do some shopping(we call it messages Dalek Zander) and I’ll need to keep an eye on the VAT it’s a right bastirt

heedtracker

Nope there’s nothing about the end of Balls career on the BBC. They’re maybe a bit busy trying to cover up this next Labour in Scotland farce. link to bbc.co.uk

There’s no mention of why Labour head of Aberdeen council got the boot but said Bonkers Barney’ sent me my council tax bill with a letter telling me to vote no, it’s what the Council wants. Also Barney’s side kick Wullie banned all SNP Scots.gov people from Aberdeen too.

caz-m

O/T a wee bit,

Wullie Rennie’s question for Alex Salmond on Thursday at FMQs has come out a bit early has it not.

link to bbc.co.uk

MochaChoca

The more I look at it the more the figure looks to be correct.

13bn over 26.4million households equates to £490

Although a lot of the VAT is paid by business, most of that is claimed back, and the cost of any that isn’t eventually gets passed down to consumers.

£18000 disposable, per year, per household, spent on full rated items sounds like a lot to us lot up here in Scotland where few are lucky enough to see that, but remember the graphics of where the wealth goes and it starts looking far more feasible, the average household in the UK doesn’t really resemble the average household in Scotland.

Just don’t want to see any of us decrying the figure if it turns out actually to be reasonably accurate.

MochaChoca

And BTW I’m not a cheerleader for Labour, happy to see them making an erse of things, and the fact that DA wasn’t able to get his head around the figure says plenty. But in this instance it looks like it’s A Neil who was a mile out, that’s almost as good.

heedtracker

If it is all Ed Balls fault, shurely this is the time for the greatest living Chancellor of the Exchequer England never had to strike. Bullshitter of the day Douglas Alexander takes over as head of ukok and the Flipper gets made up to the front bench, where he truly belongs. He did help Crash Gordon save the world a wee bit.

call me dave

@big jock

As pointed out the poster shows fruit & veg and some canned drinks which are all zero rated for vat.

link to revenue.ie

heedtracker

Just don’t want to see any of us decrying the figure if it turns out actually to be reasonably accurate.

Neil’s point was that this concocted extra £450 VAT take could only come from a spend of over £21k per year on VATable stuff, which is clearly a massive over estimate, unless average earners don’t eat etc.

caz-m

This will be the first time for decades that Scottish Labour MPs will have had to fight for their seats.

For years there has been NO opposition, then suddenly they are under serious threat of loosing their seat and also their United Kingdom.

BBC Scotland could also be added to that exact same scenario.

For years they have had license fee money from Scotland and it has went unchallenged regards were the money went to.

Now they are suddenly realising that the money and their power in Scotland will all be gone. For good.

BBC Scotland and Scottish Labour are hanging on to Scotland by their fingertips. Only a matter of time before they can hold on no longer.

And we will be rid of them.

Clootie

@MochaChoca

Keep trying – someone may bite

Tim

Test to see if ALL my posts are being spam blocked. :-/

Griminish

I must apologise, I read the wrong figures. It would appear that the increase in VAT receipts over the past 3 years is closer to £30billion and not the £10b I quoted. That would give an average figure in the region of £360 per annum per household. This opens up a can of worms, because as Andrew suggested you would need a disposable income for normal VAT rated objetcs in the region of £20,000. Since this is not feasable it only highlights the inequality in our society. The average is meaningless because the £30billion extra VAT must have been generated mainly from the very wealthy in society.

Tim

Nope! I’ll send more quotes through the contact page Rev. I typed the damn thing out, someone else is going to see it! In the meantime, anyone can look up “1,350” (mind the comma, 3×450=1350) in Hansard.

bunter

Some nice juicy stories for YES around today, but BetterTogetherBBC just seem not to be interested, preferring to go for SNP bashing and some huge ticket cockup, allegedly, regards the Commonwealth games.

Don’t they just love to do down Glasgows games!

Nemo

MuchaChoca – a couple of Labour quotes in Stu’s ATL article reference a family earning £20,000 per year. There is no way that they could spend £21,600 on 20% rated VAT items in one year, even if they paid no tax.

Also, the way averages work is very misleading. For example, if you have 99 families on £10,000 per annum and one family on £10 million per annum, then the average income is £10,990,000 divided by 100 i.e. £109,900 per annum, although this is almost 11 times the annual income of each of 99 families. With the great disparity in wealth between the top 1 to 5% and the lowest 20% of the population, this may not be so far out!

That is why it is often misleading to use averages and why people who care about results tend to use median income, i.e. that point where 50% of the population is above and 50% below, but that is another topic.

heedtracker

link to careerssearch.bbc.co.uk They are getting ready to pull out soon. See how many BBC jobs there are north of the nob.orders.com non border. 2

Flower of Scotland

John Beattie and Newsdrive! Of all the news in the world! Poor wee Scotland, too wee, too stupid to even organise some daft games! British soldiers might end up in court for illegal action in Iraq! , bus crash in Cornwall. One dead!, Pfizer takeover? No! Radio Scotland BBC spends hours moaning about Ticketmaster! Please, Please after Independence lets get rid of them!

Murray McCallum

The more you look at the advert, its specific wording, the quotes of Labour MPs over the years, the fact they have no intention of altering VAT then the ever more absurd this campaign message is.

Labour have gotten very lazy and seem to think a few slogans, rather than policies, could still win them an election.

Greannach

I’m glad Cathy Jamieson had something to say on this. It might deflect attention away for her vote in support of the Cameron-Clegg government’s cap on benefits spending on 26th March. In her Kilmarnock & Loudoun constitution, 22% of children live in poverty, peaking at 33% in Kilmarnock South and 26% in Ballochmyle Wards. I’d say Cathy Jamieson’s vote has hit families hard too.

Andy-B

Watched the fiasco on the Sunday Politics show,surprisingly Andrew Neil, didn’t let Douglas Alexander of the hook,Labour if nothing else are consistant with their lies.

O/T Alex Salmond and ex Bank of England chief Mervyn King may not have agreed on the pound, but there’s another pound buster Mr King and Mr Salmond, definitely do agree on.

link to uk.reuters.com

Liquidlenny

Ot chunky mark london artist taxi driver coming to scotland lets give him a wings welcome what about a counting house wos night two

Jamie Arriere

Do they really think rising food prices have anything to do with Government VAT policy, and nothing to do with the catastrophic effect of climate change on harvests in the past 5 years? (which not even Crash Gordon in his cape & y-fronts can do anything about)

link to ft.com

These Labour idiots are intellectual pygmies and completely unelectable, and that makes their support of welfare caps and cuts for the poorest in society, in the face of these rises, nothing less than criminal.

Nana Smith

Off topic

mystery of the missing poll!

link to heraldscotland.com

Elspeth

Apologies, O/T.

Could this be useful as reference? Brings it home somewhat when you see details of MSM ownership and political orientation set down in a handy table.

link to leftfootforward.org

I know it’s from last year, but it won’t be wildly off.

gordoz

O/T – On Vote No Borders

Seriously obtuse emblam – why use the Saltire ?

In sense of no borders should the U Jack not be used by them if they are so proud and affectionate towards GB ??

MochaChoca

Don’t worry i’m quite aware of the potential difference between median and average.

I also noticed the £20k figure in a couple of the quotes, but they don’t relate that £20k in any way to an average.

But the £450 figure does refer to the average, and in 2011 apparently the average net household income was £38,547.

After deductions, essentials and a proportion of zero or low rated items £21600 isn’t actually an unrealistic figure.

As I said earlier look at the VAT implications of running a normal family car.

Horseboy

Great News for Aberdeen and Scotland.
Aberdeen’s British Labour Party council leader, madcap Barney Crockett SACKED!

I’m fearful Aberdeen’s LabourTory council want’s to increase the Council Tax.
I don’t use any of the council services, yet I’m paying for something I can’t afford! I’m struggling.

I’m definitely voting for Council Tax freeze.

Dangerously incompetent Labour fanatic Barney Crockett’s dismissal is a happy day for democracy!

gordoz

@ Nana Smith says:

Mystery of the missing Ipsos Mori Ref poll!

Can this be sourced via an FOI request ? ?

crazycat

Taking the increase in the total amount of VAT raised, and dividing it by the number of households, gives the “household average”, which is a mean.

This is not necessarily (and indeed isn’t in this case) the same as the increase experienced by the “average household”, particularly when that average household is defined as having the median income.

Whoever designed the poster may understand that, but I suspect its defenders are merely innumerate.

gordoz

@Horseboy – Barney ‘the rocket’ Crockett

Any bets they’ll put another idiot in his place ??

It is Labour in Aberdeen remember.

crazycat

Sorry, MocaChoca – your latest hadn’t appeared when I submitted mine.

I take your point.

Nana Smith

@gordoz

One of the comments on the mystery poll article states the SG have tabled a question re FOI request so lets hope we get the truth.

Murray McCallum

MochaChoca

The Labour poster states “£450 extra VAT on your shopping bill”

The VAT rise was 17.5% to 20.0% – a rise of 2.5%. Now I think you would need to be driving a Hummer or a very long distance to the supermarket to rack up such a significant amount of extra VAT.

If it is the big deal Labour says it is (“cost of living crisis” and all that) then why don’t they pledge to reduce VAT? Real policies are harder than slogans.

caz-m

Bunter

Regular pastime activities at BBC Scotland.

Bashing the Commonwealth Games and anything to do with Bannockburn.

Union Jack brill, Saltire bad.

They are getting a new piece of kit fitted to all their camera’s for the Commonwealth Games. This will be able to spot a Saltire from anywhere in the crowd and automatically convert it into a Union Jack.

Triangular Ears

It’s champagne socialists like wee Doogie and the rest of the London Labour set that will be hit with an extra £450 a year VAT on their luxury vattable goods at Waitrose.

This is just another illustration of how out of touch they are with you and I.

dkcm99

caz-m

“They are getting a new piece of kit fitted to all their camera’s for the Commonwealth Games. This will be able to spot a Saltire from anywhere in the crowd and automatically convert it into a Union Jack”.

Please tell me you’re joking.

Dave McEwan Hill

I think the titles Better Together have adopted are highly significant.
Do I see the hand of God here?

I mean, U kok and NoBs. How very apt

fairiefromtheearth

LOL stop destroying people Rev i cant take it any more, my list is getting too long. 😉

MochaChoca

I’m pretty sure the average dual fuel bill isn’t £1264 per month.

Horseboy

All yesterday and All today BBC Radio Scotland have been relentlessly trashing the Commonwealth Games, about its ticket sales access.

Its BBC Radio Scotland’s lead story. Its a non story.

ps. my ex sojer pal told me the British Establishment wants everything in Scotland to be failure. It strengthens British UK cause, and the Scots are unsuccessful entity.

eg. New Holyrood Parliament building 10 times the cost.
Old Forth Road Bridge with design life of 100years, is rotting after 40years!

Nobody held to account!

Scots budget consumed on old road bridge repairs, and cost of building new road bridge.
For me the new bridge is good expenditure, if its designed to last 100years.

Scottish Government lawyers write the bridge building contract holding the bridge builders liable for future bridge failures, its common sense.

This is occurs in $100,000 per day offshore rig hire operations, simples!

Nana Smith

Follow up re the mystery poll

link to newsnetscotland.com

MochaChoca

My house is worth just below £250k but my mortgage is only £560 per month (I’ve a bit of equity, but probably not much more than average)

Murray McCallum

link to telegraph.co.uk

“According to shopping comparison website mySupermarket.co.uk, the tax will add an annual average of £33 to each supermarket shopper’s basket when it comes in on January 4.”

Maybe Labour MPs do drive Humvees and buy ready prepared and heated food to get to £450.00?

MochaChoca

Look, I’m not in the habit of defending Labour, even when they are attacking the Tories.

And the poster is clearly very misleading, making it look like the extra is purely for the messages, but the extra VAT supposedly raised, divided by the number of households does tally to achieve the figure they have stated.

MochaChoca

Between my missus and I we spend about £200 a month on petrol/diesel, there’s £60 per year of an increase, one us will likely change our car each couple of years or so, there’s another £250/yr

We’re pretty average.

Ken500

MP will not be paying any more VAT tax. The taxpayers paying the increase VAT tax will be paying it for them, along with MP’s expenses, second mortgages and food Bill. Two for the prices of one. Buy extra and put an item in the MP’s swag bag. Along with the tax evasion.

Food banks etc existing for the poor, most vulnerable after being sanction and walking miles.

@ MochaChoca

In a hole, stop digging.

Ken500

The average person doesn’t change a car, every three years.

Truth

Whilst I’m not for a second defending the suggestion that average families have £21k of “disposable” income, it has to be remembered that not everyone has the luxury of, or even chooses to live within their means.

Many people rightly (to even feed themselves) or wrongly, rack up thousands of pounds in debt each year.

That is one way, they can indeed spend more than they earn and consequently more VAT.

Murray McCallum

Total UK Treasury tax receipts were £550.6 billion for 2012-13.

That equates to an average household tax bill of £20.8 million.

Taking a UK tax figure and dividing it by the number of households (as businesses ultimately pass on taxes to consumers) is misleading.

a2

“Spookily the average dual-fuel bill is also £1264 a month:”

are you sure?

a2

Have you inherited A. darlings calculator?

“Personally, my electricity and gas costs are FAR higher than that. More in the region of £2000 a year. So I find it extremely plausible.”

and £2000 /12 is ?

MochaChoca

U sure about that Murray?

Craig

To incur £450 EXTRA VAT PER YEAR would mean a family spending £18,000 PER YEAR on items subject to 20% VAT.

AVERAGE figures in the UK are completely skewed because of a few hundred individuals earning in total more than perhaps what the remaining 60 million or so earn in total.

So let us look at Labour’s “HARDWORKING” family, which would refer to a typical working class family.

I don’t think there is a single working class family in the UK which spends £18,000 PER YEAR on items subject to 20% VAT.

As Stuart has pointed out, mortgage/rent, utility bills, food shopping etc are non-VATable items.

MochaChoca

Sorry Ken, I just like digging.

Just for clarity:

“the average annual UK mortgage payment, which was estimated at £7,207 in 2012.”
link to bbc.co.uk

MochaChoca

Rev,

“Then why did the hapless goon deny it and start wittering about “since the change”?”

I did say “And BTW I’m not a cheerleader for Labour, happy to see them making an erse of things, and the fact that DA wasn’t able to get his head around the figure says plenty.

Murray McCallum

MochaChoca

I’m pretty sure UK businesses have overseas customers.

I’m pretty sure the UK contains many global HQs who incur VAT and many other UK taxes that are not recovered from their relatively small UK customer base.

Are you sure that UK taxes are only ultimately recharged to UK consumers?

MochaChoca

Think he’s pointing out that in the process of ripping my comment apart you said that the average dual fuel bill is over 12 hundred quid per month. 😉

MochaChoca

Point taken.

MochaChoca

Murray, I was thinking about that aspect a wee while ago. Not sure to be honest. But my understanding is that overseas customers do not have to pay VAT, although business to business transaction earlier in the supply chain presumably do.

Anyhoo, the total UK VAT would come to £490 if divided between households, so the ‘spare’ £40 May account for the purely business to business amount. (All firms over a certain turnover must be VAT registered , and can therefore most business VAT can be claimed back), it’s largely VAT paid by consumers which actually counts, and, yes consumers will always end up paying for any other cost increases generated by VAT elsewhere in the supply chain.

Murray McCallum

MochaChoca

Taking the estimated impact of the 2.5% standard rate VAT increase and dividing it by the number of UK households could come out around £450.

What does that mean? Has it caused a cost of living increase?

Just concentrating on UK business, it assumes that companies did not change their net prices downwards after the VAT hike. They would do this to ensure people still bought their products.

The £450 increase is not going to come out in a shopping bill (as implied by Labour) and as you have suggested above you have to make pretty aggressive assumptions about buying cars and other expensive items to get to this level of increase.

You gave the example of cars.

link to bassetts.citroen.co.uk

This is quite popular in promotional advertising. Obviously VAT is paid on the car but, in this example, Citreon are reducing their net price and incurring a reduced profit margin.

So more VAT *IS* paid to the Treasury *BUT NO INCREASED COST HAS BEEN PASSED TO THE CONSUMER*.

It is misleading to take a total UK tax figure and divide it by the number of households to infer a cost increase.

fairiefromtheearth

Murry Mcallum i remembered when they raised vat and your right things stayed the same price they just cut the weight of the product to make up the diffrence.

fairiefromtheearth

thats in food you pay vat on.CHOCOLATE 😉 yummy CAKE 😉

MochaChoca

Yes, and do any of these firms just absorb the loss caused by ‘we pay the VAT’ offers? No, they’re squeezing their workers, or squeezing their suppliers who in turn squeeze their workers.

The end result is still the ‘average family’ being hit for the cost.

MochaChoca

Admittedly, in the case of Citroen it’s maybe the French who have absorbed the cost, but if retailers are doing this with imported goods here, it’s every bit as likely that retailers abroad, who sell our exports, are having to do the same.

MochaChoca

Anyhoo, as I said earlier the shopping basket poster is still hugely misleading, and I’m not defending Labour.

MochaChoca

BTW if Citroen’s ‘paying the VAT’ offer was purely a response to the rate rise then the VAT collected on a £15 grand mid-range C4 has went from £2234 to £2083.

Probably not what the rate rise had intended.

orri

I’d almost forgotten that Labour only put VAT up to 17.5% in early 2010. Perhaps they did too and were under the impression that the actual increase was 5%. I also seem to remember them admitting that it’d probably go up to 20% if the got in again.
The main problem isn’t that in some scenarios you could justify the words. It’s that the image used to illustrate it is too specific and it’s aim is the punchline “two peas in a pod”. It’s a bit like all the outrageous headlines you get that don’t match the articles but that people quote who seem not to have actually read them.

Brotyboy

@orri

Wouldn’t be short for Orinoco by any chance?

orri

Nope. It’s Norse/Irish in origin.

Brotyboy

Okay, thought I may have found an erstwhile acquaintance.

[…] The poster isn’t the problem […]

NewPoster

Hello,

>>To pay an extra £450 a year in VAT, families would have to be spending £21,600 on things liable for the full 20% rate

This is genuine question as this has got me quite confused.

I’ve had a go on my calculator a few times and I get
£450 is 20% of £2250.

How does Andrews Neil’s figure of “£21,600 of VAT-able products at 20%” get to £450?

20% of £21,600 = £4320

No?

Grant_M

Taking £21,600 per annum of VAT-able products as a constant figure…

at the previous VAT rate – you could spend £18382.98 + 17.5% VAT (£3,217.02) = £21,600

at the current VAT rate – your spending power is £18,000 + 20% VAT (£3,600) = £21,600.

therefore, the 2.5% increase on VAT amounts to (£3,600.00 – £3,217.02) = £382.98


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