Will the 2.5% VAT increase stop you spending as much?

Your Comments

If the Conservatives do not do do this our debt will keep on rising.The Labour party offer no alternative, and they left this country with a gaping black hole of debt.This year will be painfull for many people, but it has to be done, to get us back on our feet again.Their is no gain for us without pain.I am thankfull that it is not the Labour party leading this country as we would have been bankcrupt by now, and Alan Johnson is a joke, he knows nothing abou the economy, he was a postman before he became a councillor.He is intellectually, inadequate, in other words THICK.!

Well the deficit has to be paid somehow, at least we can choose what we buy. If the Labour party were in Government they would have increased National Insurance and we would have been a lot worse off.

VAT is very unfair. The cost of funding the country's recovery is being met by ordinary working class people, the salt of the earth. The people who caused the mess, i.e. the bankers, are still being allowed to put their noses into the trough. VAT is not fair. We are not in this all together. The rich will not feel this tax much. Far better if the tax rates for higher earners was increased and VAT left alone.


How are Customs going to stop imports from the Netherlands where there is no VAT.
This illegal trade is worth 3bn plus yearly

I think that VAT is the fairest way to pay additional tax. If VAT didn't go up, then we would have to pay some other way.
Also, most people said the previous 2.5% drop in VAT wasn't worth worying about and would make no difference to their spending, so it is rediculous to complain about the same increaase now.

VAT is a regressive tax that hits the poorest the hardest. Far better to raise income tax. The black hole in the economy was caused by the banks, which required a massive bail out by the Labour government. This strategy was supported by all of the leading World economies. The Tories opposed this strategy, which if it had not been implemented, would have led to a World wide bank crash, with all of the consequences that would have bought!
The Tories always raise VAT, despite saying they would not prior to the election, which id what the Lib Dems said as well.

To comment 2 - the Labour party did raise National Insurance, and the current Government didn't reverse it, so that goes up in April. It's interesting that while we in the UK are trying to repair the economy by cutting back and increasing taxes the Americans are doing pretty much the reverse - will be interesting to see which works better. That said I do think it will make people think twice about larger purchases, but day to day you can't avoid it really.

The Labour party did indeed offer an alternative the the mess the country were put in to by the bankers, they wanted to put off any massive increase in taxation and concentrate on jobs in the first 12 months of a new term of office,i.e they wanted to look after the pockets and jobs of the ordinary people of this country, but alas we have a ConDem government pact that wants to bring instant misery to millions of families instead.

When the VAT went down to 15% in I think 2009, the amount of vat revenue to the government went up & more jobs were created. Why? That's easy, people had more money to spend & that's what they did. I wont spend much in the UK ever again! Vat revenue will fall, jobs will go & the debt will rise!
Instead the idiot government put the vat to 20% I spent alot in the past. But I will be shopping in France as it is cheaper & as is the petrol & diesel even with the travel costs etc!
The government have said they will give up to £5,000 per electric car purchased. Why not just give us all £5,000 to have solar panels put in our homes? That will create thousands of NEW jobs & put less pressure on the electricity power generation & actually be good for the environment etc!

George Osborne, the simple things work. Putting up vat puts everything up as everything in the UK goes by road & there is vat on fuel!

Wait for inflation to go skyward! Then look at Osborn's face if confusion!
Kiss goodbye to UK jobs & watch them go abroad. But that is good for the UK isn't it Mr Osborne?
If you want to cut the debt, why now tackle the EU spending RISE?
Why not come out of the EU for 1 day & then re write the rules in favour of the UK instead of people we have never had a chance to ever vote for in the first place!

Working in the public sector I have been told there will be no pay rise for 2 years at least. Now with VAT at 20% there is very little point in working. I await the redundacy tap on the shoulder and a life on the dole at 58...

Postman Alan Johnson may have been but why that has any relevance for his intellectual adequacy I fail to see. And at least the public money spent on his education seems to have taught him to spell (and punctuate) a little better than some!

If the Conservatives do not do do this our debt will keep on rising.The Labour party offer no alternative, and they left this country with a gaping black hole of debt.This year will be PAINFULL for many people, but it has to be done, to get us back on our feet again. THEIR is no gain for us without pain.I am THANKFULL that it is not the Labour party leading this country as we would have been BANKCRUPT by now, and Alan Johnson is a joke, he knows nothing ABOU the economy, he was a postman before he became a councillor.He is intellectually, inadequate, in other words THICK.!

Why should I be forced to pay an extra 2.5% when the government are making no effort to stop there spending on things.
They said we are having to pay this to decrease the deficit, so why do they then pledge an extra ££ million to Europe. What a smack in the face.
Why do they say they can't afford to pay for front line services, yet bail out Ireland by £70 million.
Why should my hard earned money pay for a bail out on banks when I don't bank with them.
So every penny I saved last year in cutting out everything has been wasted, because everything has gone up.
I still have to get the children to school because there are no buses and it's an 8.5 mile round trip.
Every week I am being sucked dry of money I don't have.
All these extra 2.5% soon add up and next month is horrendous in bills, house insurance, contents insurance, car insurance, petrol, heating bills.
I have already taken out the TV and stopped paying for a TV licence to save money.
We have nothing left.

Here we go again, Labour supporters blaming the banks for the economic mess the last government left us. Fact - total deficit is £950 billion, £50 billion to bail out the banks, the rest, £900 billion borrowed by the last incompetent labour government.

I only have X pounds to spend each month. So the increase in VAT means that I will be buying 2% less goods. Therefore the retailers will be selling fewer items. That means that they will not have the same revenue so they will have less money in their business.
How do they cope with that? They shed staff. Now these staff have no income, so they stop spending which then causes a knock-on effect to other retailers, suppliers and manufacturers so that even more staff are laid off.
This is not only recessive for the retailer, but the total amount of revenue from VAT goes down despite the 2.5% increase in rate.
Every Conservative government since I started voting in the early 70's has increased unemployment, and this one is no different.
If people are lucky enough to get another job, then it will be on lower pay. Have a look at vacancies if you don't believe me.

We need to remember that politicians first loyalty is to their own pocket, and Conservative politicians are all extremely wealthy. That is why they help the rich and make the poor even poorer.

VAT just adds up to high inflation that the government pretend not to see. The official figure is something about 3-4% which is total nonsense. My budget hasn't increased for last 3 years and that means the extra money I pay for fuel, electricity, travel etc must be taken from somewhere else. The "somewhere else" means the old fridge is going to stay longer, my local garage will not see me when service is due, I will make few more cinema/theatre, I will not call my local builder any time soon neither. The big banks and insurance companies still get their share as we must pay but it will affect some local and smaller businesses that rely on our spare cash.

The only way to get the UK to be a rich nation again is to stop giving our money away abroard. We are getting hit with more taxes and cut backs than we want . We have to put up with this s**t while they give our money away.

Its about time the people the UK stood up and said STOP GIVING OUR MONEY AWAY! But that will never happen.. we all know that .
We go into wars that cost us a bloody fortune, money that we don't have.
If the USA says we have to go to war then the UK does as it is told. Look what happened over ten years ago and we are still paying for that cock-up.

Stop doing what the USA and the EU wants and do what the people of the UK want. Before the UK Government steps in to sort others out ,sort your own Country out first then we might save a hell of a lot of money. Cut back on aid abroard. Then and only then start giving aid out.

Look in the Daily Express they have a voucher called GET US OUT OF THE EU fill that in and send it off

Look at the economic growth and prosperity that Hong Kong has made for itself by scrapping taxes. If this government were serious about wanting to make this a healthy, growing economy then they should look at the systems and methodology that have provided the results for the best in the world. Tax, tax and more tax does nothing but stifle the free flow of money in a market economy and give incompetent politicians of all denominations huge funds to waste on beaureacracy.

what has the fact he was a postman got to do with anything? are you implying Postmen are thick? If so thats a bit of a rash and generalised statement.

in my opinion its not the 2.5% increase in VAT that will hit me the hardest it will be the increase in retails prices in the coming months. For example
I believe an item previously (pre 4th Jan 2011) retailing at £100 will not in general be increased to £102.50p . Initially the extra vat will be soaked up by the retailers but more than likely over the coming weeks/months be increased to £105.00 or maybe even £110.00.
Would like to know other peoples thoughts and views on this opinion.

I totally understand your reasonings for being upset and I dont want you to think that im not of the same option, but unfortunately im of the understanding that things like bailing out ireland need to be done because although you may not bank with them personally our country its self has a huge ammount of financial ties with them and effectivley banks with Ireland. Not bailing Ireland out would only lead to bigger finacial complications in the UK.

150 BILLION legacy. Thanks Gordon!! Time to stop the EU annual payments.

There really needs to be informed Public debate about what debt exactly we are talking about. British Government borrowing is structured out over around 14 years.

It was increased in order to stop the UK economy going into free fall after Wall Street and major UK Banks got it horribly wrong and needed the UK Government to recapitilise them. Hernce an increased debt level.

Of course there needs to be "some" cuts and retrenchment but the debate should be about how drastic the cuts and increases in taxation shouyld be.

Please broaden your horizon beyond Labour and the Conservatives. Cuts would have occurred under Mr. Darling and taxes would increase but not in such a short and draconian time frame.

Not sure what you meant about the Netherlands having no VAT. This site clearly states it is charged @ 19% with a lower rate of 6% for certain goods and services.

This country has been living on debt (credit) since WW2. The last exarcerbated this by their reckless spending. As this country has hardly any manufacturing abilities having been sold off during the last Tory governments-we virtually rely on tourism and banking, insurance & whiskey for our exports! I would have thought that with their anti EU stance, the last thing to increase would have been the VAT rate. I always understood that at least 1% of all VAT collected was handed over to Brussels, so apart from their 2.9% rise last week, the Tories have given them an extra bonus!! We need politicians that have been 'working in the street', like we used to have and not these millionaires (inherited)running the country and additioally - GET OUT OF THE EU!!

What nonsense, we are in a world wide recession caused in the main by greedy incompetent financial institutions.Alan Johnson may not have economic qualifications but he has worked for a living, which Osborne never has. In fact he has no experience or qualifications & owes his position to "connections".Labour did have a policy, which did not include putting the maximum buden on the poorest section of the community. This increase in VAT is another election promise broken by the Condems.

I agree that the debt must be tackled. But it was announced that the NEW government borrowed MORE money in November or Dec 2010 than Labour did!

That is NOT tackling the debt, but adding to it!
VAT when it went to 15% actually caused more people to spend more money as they had more money to spend. A vat rise will encourage people to spend LESS!

What the new government need to do is to start banning foreign citizens from receiving benefits, NHS care & Housing will save hundreds of billions over the next few years & that should apply apply to EU & outside EU citizens.
Illegal immigrants have flooded into our country & don't pay any tax, take jobs from UK workers & some commit violent crime. We need to be tough like FRANCE!
The new government don't appear to have realised that the entire population of Ireland, Spain, Greece & Portugal in reality could come to the UK & be legally entitled to the SAME benefits as someone who was born in the UK & paid taxes for decades!
It is this point that needs to be tackled as a huge sum of OUR tax money is going off shore & is NOT being spent here in the UK.

Taxes increase and public sector pay frozen. Why do we go to work?

To pay for wars that have nothing to do with us, to fund the EU so that it can sanction our farmers and fishermen and offer unfair subsidies to other European nations.

To pay for scoungers who are not entitled to benefits as they are perfectly well able to work. Reorganising the benefit system will be a costly renaming exercise as per usual.

To pay for 1000's of EU and illigal immigrants that enter our system of benefits and access the NHS without having contibuted to it.

No matter who we vote into Government, they are self serving and it appears fraudulent, who blame the Government prior to them. What's the point in working hard, and saving when you might as well not bother, and just live off the state.


Britain was once Great but no more, We have got to have a tight rein on spending for at least a year, (AS LONG AS THE MPS DONT CHEAT US AGAIN)
Is there anyone in Parliment I can trust?

Pensioners will be the worst hit with the VAT rise. Also why are we still spending more money than any other country on overseas aid isn't time we took care of those at home first before handing out money to corrupt overseas governments

Surely you`ve missed the point , the CONdems are going ahead with raising the National Insurance contribution as well !!!!!!!!!!!

As a legal point have the CONdems the legal right to tamper with how the NHS budget is administered without full and open consent of it`s contributors ( thats us the tax/NI payers ?

Oh hurrah, more tax.
Don't get me wrong I know that we need to cut back on the deficit and save money, and I support that, and that's when I work in the public sector and am in danger of loosing my job come March.
But if I do manage to hold on to it, I then have to pay more for my electricity and gas, they've raised the prices anyway and then VAT on top.
I have to pay more for my petrol even though it's already risen about 20p per litre over the last year, I might as well give up the car, but then I'd have to rely on public transport and we all know that's not going to save me money, or save my sanity.
I am sick and tired of seeing our money being given away to bail out other countries and to prop up the EU. I say pull out of the EU, what good is it doing us anyway apart from meaning we have to bail out failing countries within it. One of the richest nations in the EU is Germany and they’re already thinking about pulling out, I say we do the same.
Then we can also stop paying out benefits to migrants whose families are back in their home countries and yet the British government is paying them child allowance. We are paying for people who don’t even live in this country, that’s just wrong!
I don’t have a problem with some economic migrants I know a lot of hardworking eastern Europeans who I would be happy to have stay, what I do have a problem with is all the illegal immigrants, and the scroungers.
Other countries have TV programmes telling them how to come to England and claim off our benefits system, that’s how easy it is to claim benefits in this country.
Someone needs to go down to London and show the politicians how to work out a budget and to use Martin’s mantra, ‘do I need it, will I use it, can I afford it’, the answer at the moment I think is no, we can’t afford it, so stop giving our money away.

If you believe that its you who is thick. Instead of Joe public having to pay yet again for government mis-management make all these fiddling MP pay they are bent and have brought this country down while feathering their own nests

Will the progressives (of any party) ever learn? The way to get out of a deficit is to grow the economy, not increase taxes. It's been proven time and time again that lowering taxes actually increases revenue to the government. But of course that goes against the instinct of the progressive who thinks that only higher taxes can solve any problem. It's time for true conservative principles. Lower taxes. Establish a flat tax. (The only truly fair tax system.) Eliminate senseless regulation and bureaucracy that stifle growth. Reduce the size of government. Get out of the EU. Cut, cut, cut spending on social welfare. I'm from America and I am shocked at the number of undeserving people receiving benefits in this country. Enough is enough already. The leftists love to talk about sustainability. What's truly unsustainable is this welfare society you've created. It's easy to bash the banks, and they are partly responsible, but so is the irresponsibility of every single person who took those loans knowing they couldn't afford to repay them. Just because someone is giving you a loan doesn't mean you have to take it. Where's the personal responsibility? Everyone blames someone else today. Well it's time to look at ourselves for the mess we've created by establishing this social utopia. Everyone must be accountable. The government, the banks and yes, every single citizen and resident as well. We have a duty to keep all of our houses in order. Choose representatives who don't promise the world paid with money they don't have. Only by means of a moral and truly free society will we all prosper.


The coalition govt came to power on the pretence that they want to stop the UK debt and grow the economy. Its a big joke! everywhere you look the economy is being battered and the ministers are making 'school boy' error. How can you grow the economy by increasing taxes and higher VAT? The public sector is being destroyed all in the name of savings, more that half a million jobs gone within first six months of this govt and more job losses are under way! Inflation going up and rising, unemployment rising, the economy is shrinking fast. How can this govt pay the debts. Of course we can not spend our way out of recession, but the Austerity measures couple with job losses and lack of lending from the banks to small business is a big crisis that may engulf us all. I think the VAT increase should be abolished, govt force the banks to start lending again. Small businesses are closing at record levels, we need them to stay open to create the jobs that is urgently needed.

Yes, I agree with you. The problem is the coalition govt is hell bent on destroying our public services and disrupting everything good about our institutions. The only thing they care about is about higher taxes and more regulations! On how to create jobs and grow the economy that is LABOUR PARTY POLICIES! They are playing politics with our economy!!!

I am disappointed at your comments. I feel you are being misled by the conservatives about their Agenda! I know simple economic teach us that higher taxes result in lower receipts. This govt policies are inconsistent and have huge negative effect on jobs. I beg to differ, Mr Osbone is making textbook oh! school boy error!! His figures doesn't add up.