Tory dishonesty on austerity logic

by Tom Miller
Wednesday, June 23rd, 2010

Liberal Conspiracy reports this morning that the Tories unveiled a poster two years ago accusing Labour of dishonestly planning to raise VAT by 20% without letting the public know. Horror.

They have, of course, just won an election, stating that they themselves had ‘no plans’ to raise VAT, whilst being propped up by a pliant coalition partner who promised to make tax more progressive as a key part of their manifesto platform. A malfeasant crutch if there ever was one.

At the same time, the UK’s trade deficit is down, and the size of the deficit is actually lower than predicted. So why did they need to announce this key rise in an outrageous tax, when they never included it in their manifesto?

‘It’s all Labour’s fault’, they answer, ‘for the size of the structural deficit’.

Herein lies the problem. Between their VAT wheeze in 2008 and their VAT rise in 2010, the Tories supported (having previously opposed) a massive bail-out of the banking system, and subsequent support for all of those who rely upon it (i.e. pretty much everyone). They later opposed fiscal stimulus, but refuse to attack it now, as it is generally accepted that most elements of the policy (including a temporary VAT cut, no less) worked. Neither of these are ‘structural’ deficit elements – but they are the only thing that has really changed between the Tory poster and now.

So ‘why the austerity’? If we are talking about the parts of the deficit which were present before the bail-out, why do we now need to do exactly what the Tories purported to campaign against two years ago, around when it was happening?

The truth is that the austerity measures being implemented, tax rises and job cuts, can really only rest, if at all, on the background logic of paying off a bailout and the fiscal stimulus. The bailout, in large parts, the Tories accepted and subsequently supported… and they also knew, like the rest of us, that an enormous fiscal stimulus was taking place.

All whilst they were campaigning not to have VAT raised.

And to add to all of that, they could have just frozen Britain’s comparatively low corporation tax. And they could cut more slowly, with normal budgetary cycles, for they have not justified their pace.

The Tories are implementing austerity not because they are forced to, but because they believe in it, and because they recognise a class-struggle opportunity when they see one.

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About The Author

Tom Miller is Media and Marketing Officer for Tribune.
  • Adam Colclough

    George Osborne’s ‘austerity budget’ is an economic and social disaster from which it will take years for our country to recover.

    As Harriet Harman pointed out in the commons on Tuesday it is a reckless exercise that will hit hardest the people who can least afford to pay, the boy Chancellor might think he can pull the wool over most people’s eyes by claiming the rich will pay their fair share, anyone with experience of how the world really works will know the rich won’t pay a penny more than their accountants can fix for them to.

    The budget also seems to be based on a simplistic idea that everything the private sector does is good and, correspondingly everything the public sector does is therefore bad. Never mind little details like the public sector delivering services no private company would take on because the profit margin is too small; common sense always takes second place to prejudice in Conservative thinking.

    Unfortunately a large section of the public have bought into the idea that slashing public spending and services is the only option, by the time they realise that if austerity is the answer you’re probably asking the wrong question it might be too late to put things right.

  • Adam Colclough

    George Osborne’s ‘austerity budget’ is an economic and social disaster from which it will take years for our country to recover.

    As Harriet Harman pointed out in the commons on Tuesday it is a reckless exercise that will hit hardest the people who can least afford to pay, the boy Chancellor might think he can pull the wool over most people’s eyes by claiming the rich will pay their fair share, anyone with experience of how the world really works will know the rich won’t pay a penny more than their accountants can fix for them to.

    The budget also seems to be based on a simplistic idea that everything the private sector does is good and, correspondingly everything the public sector does is therefore bad. Never mind little details like the public sector delivering services no private company would take on because the profit margin is too small; common sense always takes second place to prejudice in Conservative thinking.

    Unfortunately a large section of the public have bought into the idea that slashing public spending and services is the only option, by the time they realise that if austerity is the answer you’re probably asking the wrong question it might be too late to put things right.

  • Robert

    Who was it that took us into this mess, that did not see the housing bubble blow up, then decided to stop income support, remove 10p tax band, then thought hello it’s the cripples and retards who stopped me looking a hero, I’ll stop the DLA.

    yes The Tories are attacking the poor the sick the disabled people like me, so will the Tories, but who do I blame,,, Mr invisible himself brown

  • Robert

    Who was it that took us into this mess, that did not see the housing bubble blow up, then decided to stop income support, remove 10p tax band, then thought hello it’s the cripples and retards who stopped me looking a hero, I’ll stop the DLA.

    yes The Tories are attacking the poor the sick the disabled people like me, so will the Tories, but who do I blame,,, Mr invisible himself brown

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  • http://www.littlerichardjohn.blogspot.com Little Richardjohn

    This was a political Black Sunday for the Condems. The real bug-eyed, malformed nocturnal tory reptiles surface through the PR scum on the swamp.
    Ian Duncan Smith does a Tebbit, and orders the ethnic cleansing of the unemployed from their communities, and in the process releasing a tide of internal immigration of Northrons to swamp leafy, industrial Roehampton and St Albans. Exactly what’s needed to keep the southern workforce on their toes. Where else is he going to get enough aliens to keep people fighting amongst themselves? Without this competition for jobs and homes and services, they might begin to know their own value, and with it their strength, and that would be fatal to Cameron’s doctrine of People Power.
    Within an hour of Smith, Nigel Lawson admits Tories lied to the electorate on NHS ‘Ring-Fencing’. The NHS is to be slashed like everything else. And in an ultra-Stalinist proposal which will see more riots than the SPG, SUS Law, Miners’ Strike and the Polltax combined, Tory Ferret-in-Chief, Michael Gove also wants to evict the single and childless from council housing to make room for families.
    Who needs the world cup when there’s lunacy like this to marvel at?

  • http://www.littlerichardjohn.blogspot.com Little Richardjohn

    This was a political Black Sunday for the Condems. The real bug-eyed, malformed nocturnal tory reptiles surface through the PR scum on the swamp.
    Ian Duncan Smith does a Tebbit, and orders the ethnic cleansing of the unemployed from their communities, and in the process releasing a tide of internal immigration of Northrons to swamp leafy, industrial Roehampton and St Albans. Exactly what’s needed to keep the southern workforce on their toes. Where else is he going to get enough aliens to keep people fighting amongst themselves? Without this competition for jobs and homes and services, they might begin to know their own value, and with it their strength, and that would be fatal to Cameron’s doctrine of People Power.
    Within an hour of Smith, Nigel Lawson admits Tories lied to the electorate on NHS ‘Ring-Fencing’. The NHS is to be slashed like everything else. And in an ultra-Stalinist proposal which will see more riots than the SPG, SUS Law, Miners’ Strike and the Polltax combined, Tory Ferret-in-Chief, Michael Gove also wants to evict the single and childless from council housing to make room for families.
    Who needs the world cup when there’s lunacy like this to marvel at?

  • Robert

    My Labour council has just said 800 sacked.

    200 to be sacked and then re-employed on new contracts.

    No wages rise for the workers, No more traveling expenses for workers, no more over time, but the new contracts will state some over time will be worked.

    If this is not allowed then a massive unemployment and the jobs will be out sourced to private companies.

    This is a labour council for god sake, forget the dam Tories.

  • Robert

    My Labour council has just said 800 sacked.

    200 to be sacked and then re-employed on new contracts.

    No wages rise for the workers, No more traveling expenses for workers, no more over time, but the new contracts will state some over time will be worked.

    If this is not allowed then a massive unemployment and the jobs will be out sourced to private companies.

    This is a labour council for god sake, forget the dam Tories.