Monday, 12 November 2012

Labours plan for jobs - a spoof surely ?

Below direct from the Labour Party Website is their plan for jobs.

1. A £2 billion tax on bank bonuses to fund a real jobs guarantee for all young people out of work for a year and build 25,000 more affordable homes.

2. Bringing forward long-term investment projects schools, roads and transport - to get people back to work and strengthen our economy for the future.

3. Reversing the Tory-led Government's damaging VAT rise now for a temporary period - a £450 boost for a couple with children - immediate help for our high streets and for struggling families and pensioners.

4. A one year cut in VAT to 5% on home improvements, repairs and maintenance - to help homeowners and small businesses.

5. A one year national insurance tax break for every small firm which takes on extra workers - helping small businesses to grow and create jobs.
So basically - three one off measures ! one shuffling of spending and a new tax which is with the economic margin of error of not existing.

1.  The Government spends around £630 billion a year.  Another £2 billion is not a change.  You might note that the Government is spending £125 Billion more each year than it gets in Taxes - so taxing bankers bonuses - while welcome will not solve the fundamental problem.  One wonders why Labour didn't tax the bankers bonuses when they Labour were in power ?  25,000 more affordable homes would be welcome, but it is really a drop in the ocean compared to the need for affordable housing. Labours record on providing affordable Housing 1997-2010 was appalling, the worst of any Government since 1906. 

2. 'bringing forward' means - no new expenditure. Just money earmarked for spending in 2018 might in theory be spent in 2016 or 2017 - but it won't be spent in 2018.  In practice the coaltion governement has already tried to

3. Does cutting VAT boost growth ?  It would certainly cost the Government a lot of money and it might make a few families feel slightly better off for a short while - but it's hardly investment for the future.   The 'rule' is VAT rises under Labour - sound budgetary management - VAT rises under the coaltion - bad budgetary management.

4. Oh my goodness - a one year cut in VAT for home improvements - what will they think of next ? Do I really have to criticise this for people to see how small scale this is.

5. More tinkering - I imagine that a few businesses might take on staff - but mostly - it will not be the National Insurance that prevents businesses taking on staff and a one off, one year cut is not much of an incentive.

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