VATs

No, I’m not talking about the strange but effective pause-time first person combat system of Fallout 3 fame but the other and very much more boring kind. (Although I wouldn’t put it past Les Government to coerce Microsoft into using their Gamer Live system to subtract 17.5% of my Action Points, for them to put to use in another one of their completely legal and not-at-all hypercritical wars…)

Any who, by now (yes, just one paragraph in) you can already tell that my other articles haven’t been going so well and, in an effort not to be dispelled from the collective for posting too infrequently, I have fallen back to my ranting roots. Please also find enclosed a very special analogy expanded beyond comparability by yours truly…

So, VAT it is (that’s Value Added Tax for all of those dyslexics that have stumbled upon this site whilst looking for superior methods of vegetable drainage). Every type of financial data seems to be in the news at the moment and today was no different, as the Government rolled out VAT to take a kicking. Alistair Darling, our most amusingly named Chancellor (yes I too have Blackadder like visions of Gordan Brown shouting “Darling, Darling, what are you doing Darling??”), has decided to tinker with this little blighter now. Oh goody, I hear you collectively sigh, that’ll do the trick…

The analogy I heard involved the good ship Britannia having hit an iceberg and The Treasury were simply rearranging the deck chairs on board instead of solving the problem at hand. This, I feel, gives them too much credit, so I take it upon myself to embellish the story for greater accuracy and my own bloody enjoyment (after all we are British and, as such, enjoy kicking ourselves in the gut at every opportunity).

What do you mean bailout?? I'm perfectly dry thank you...
What do you mean bailout?? We're watertight thank you very much...

T’is certainly true, we have hit an iceberg of monetary problem here. However, we all stood on the bow and watched this problem approach, shouting at the captain to reach ramming speed before impact. Now we’ve hit that little Credit Crunch we’ve discovered it was just the tip of a very deep, very dark and extremely cold recession.

What-ho, the Powers That Be spring into action, but instead of pointlessly rearranging the deckchairs they begin to handout caviar and champagne to the idiots that reassured us it wasn’t such a big chunk of icy rock and stoked the furnaces to prove it. Even worse, they’re now ushered into the lifeboats and bid good voyage…

Now it’s time for the deckchairs, but instead of simply moving them around our higher-ups decide to pile them in the middle of the deck, pour flammable liquor across them and set them alight. Never considering for second that it would only result in giving us a choice between immolation and the slow sink into the freezing depths beneath, but at least we’ll have warm feeling inside and something pretty to lookout as we meet our self-inflicted demise.

Oh, and I almost forgot, there’s those poor souls that have already fallen over the side into the murky ice filled waters and are struggling for air as we speak. Why I’m sure our erstwhile commanders have a solution for them too, and here it is. Allow them to present the ping-pong ball measures. That’s right, enough of these little blighters can raise a ship (They saw it on MythBusters once) so if we throw just the right amount at these unfortunate bastards they should be able to cling on to them and rescue themselves…

Hurrah!!! Oh the humanity!!!! Etc…

It’s at times such as these I like to remind myself that all this financial shenanigans is completely made-up, an artificial mechanic we’ve been bred to believe in. Ho-hum, what’s on the other channel?? Zombie-Celebrity-Knife crime?? Brilliant…

3 thoughts on “VATs

  1. Boris W

    So you’re pro or anti VAT cut?
    The way I see it is that whenever the government makes a financial decision, the Tories say it’s a nightmare, the Lib Dems say it’s a step in the right direction but mismanaged and the only financial people who get any prime airtime bemoan that there’s no sweeping changes made.
    IANA financial analyst and I don’t feel I know anyting like enough about how a huge sprawling economy works. For my tuppence, I think criticizing without a whole bunch more information than we have is asinine.

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  2. Ado

    I’d say, if pushed, that I’m certainly pro doing something but anti tinkering here and there. I liked that the Powers That Be came out before and supported the economy by injecting liquidity into the banking system. That was the right thing to do and they did it in a big enough way to make a difference.

    Reducing VAT by 2.5% for 1 year does little to increase spending on the highstreet (as people are being very cautious with their pounds and a £1000 TV with £25 knocked off isn’t going to change anyone’s mind) and actually decreases liquidity, because the VAT retailers collect can be used in the short term to borrow against (as they don’t have to pay it immediately to the Government).

    It seems like a futile and pointless gesture that, if it works and gets people spending more is bad as that’s what got us into this mess and, if it doesn’t work, means there’s even less in the coffers to offset the borrowing we’ll have to do nationally over the next couple of years.

    I guess what I’m saying is I want decisive government, rather than what seems like headline grabbing measures that are, at best, ineffective and, at worst, detrimental.

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  3. This morning as I drove to work, I passed by conga lines of people dancing in the street and batting balloons to one another. I pulled up alongside them and rolled down my window.

    “You boy! What day is this?” I asked.

    “Why it’s the day the economy was saved, Sir!” he replied.

    “Then buy me a goose, lad!” quoth I, flicking the scamp a shiny coin.

    “But Mister! You’ve given me too much! Haven’t you heard? Value Added Tax been reduced by 2.5%!”

    I confess, I was shocked.

    “VAT the Dickens?!” I exclaimed.

    Obviously I abandoned my car there in the road and joined the happy throng.

    Not really of course. I’m telling silly lies. This VAT cut pleases no one. And it pleases no one as follows:

    Friend Darling gets less tax. We will be paying for this down the line, as I’m sure you’re aware.

    Friend Retailer – who lest we forget – has paid for the goods he’s going to sell at 17.5% VAT, has to make a tricky choice. Chum Customer will be expecting a saving, of course. But retail works on price points. If you want to buy a paw for your robot dog, and the Robot Dog Shop buys them in at £2.72, they’ll sell them on at £7.99. At lower VAT the six or so pence you’d save won’t make a difference. He’s still going to price point it at £7.99. And what are you going to do? Robot Dog looks at you pleadingly all night, hopping around on three legs and sparking out of the other.

    This leaves us with the punters. With no additional savings on the High Street (with arguments cracking off all over as to why) and a massive monetary hangover lurking around the bend like a group of knife-wielding feral teens, there’s really no concussion to draw other than we’re in the hands of a quite incredible group of bungling idiots. A group who’ve to-date ridden their luck so hard they’re now left holding nothing but a greasy saddle and looking a bit scared.

    Still. If we will waste our savings on robot dogs and the like.

    … Wait. What were we talking about?

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