Tuesday, 4 January 2011

In which I am back

Posted by Tania Kindersley.

Yes, yes: today, it's what I think about VAT. Let joy be unconfined. I know that it is what you have been waiting for, but did not quite dare ask. Now the glorious moment has come.

I am officially still on hiatus. It was really just going to be trees today, but it's as if the engine of news has revved itself up again, and is chugging away outside my front door. (Of course I know that the people to whom the news is happening, in Queensland or Ivory Coast, do not have the luxury of being able to turn it off for a few days.) Suddenly, it seems I must have opinions again, and it turns out the VAT furore is doing cartwheels in my mind.

You may have noticed by now that I have a bit of a thing for the received wisdom. Can't bloody stand it. It's so smug and lazy and set in stone. It's what my old dad calls 'making statements'. People just think if they say it loud enough everyone will fall in line. The received wisdom on Value Added Tax is that it is a regressive tax that hurts the poor the most. The current rider to this is that the reason the evil Tories are putting it up is because they hate the poor people, and want them to have no shoes. If you disagree with this, then you are mad or bad.

I am quite blazingly stupid when it comes to matters of economics. The moment I see one of those special graphs that the money people like to use, my brain breaks for the border. But in my secret bleeding liberal heart, I have always suspected that VAT might be rather a good tax, because it is a charge on consumption. The more you buy, the more you pay. It seems to me this is sensible in two ways. First of all, it is a way to get those filthy rich hedge fund managers who are the current bogeymen du jour. No accountant on earth can get them out of it. If they want to buy a £200,000 Lamborghini, they automatically devote £40,000 of that to the Exchequer, who can spend it on schools and hospitals. Second of all, it is a way of catching all those new Russians and Hong Kong plutocrats and Mrs Philip Greens in the tax net. These people may pay their taxes in the Monte Carlo, or not at all, while they swan about London, using all our facilities, but they also shop. Every time they waltz into Asprey, they send a little VAT towards a teacher's salary.

Clearly, I am naive and wrong about this, since all available received wisdom says that VAT is the work of Satan. Yet I am amazed to find I am in excellent company. The societies I admire most are the Scandinavian models. Year after year, Denmark, Sweden and Norway top every list of national well-being and good governance, without breaking out of a canter. Their VAT rates are all at 25%. So where are the headlines that say: Coalition apes Nordic model?

The other thing I love, apart from challenging easily mouthed homilies, is a sense of proportion. VAT is going up by 2.5%. This means that something which cost £10 yesterday will cost £10.25 today. Every hundred pounds spent will have another £2.50 on it. Obviously, for people on very tight budgets, £2.50 is not nothing, but neither does it seem catastrophic. I'm not a crazed deficit hawk, but it does seem to me that asking the children and the grandchildren of the next generation to deal with a national debt of close to a trillion pounds and a structural deficit of £170 billion is not progressive or moral. I'm just saying. You can start hurling the rotten fruit now.

Today's pictures are, you will be astonished to hear, of dogs and trees.

The last of the snow, rather sadly lingering like an unwanted party guest:

4th Jan 2

With no dramatic winter landscapes to shoot, I have reverted to my adoration of tree bark:

3rd Jan 3

And moss and leaves:

4th Jan 7

Some very old conifers with a very young chestnut:

4th Jan 8

The always lovely beeches:

4th Jan 1

4th Jan 9

Wild beauties, sniffing the wind:

4th Jan 4

And ready for close-up:

4th Jan 5

4th Jan 6

Today's view of the hill:

4th Jan 10

(This hill thing may get a bit same old, same old, but I suspect I may persist with it for a while.)


  1. T - there simply must be hills so that they are there if we need to run for them. And now - with the outrageous price of bread and food playing on my mind - i am going seek the sanctity of bread making and play with some smoked flour Ma gave me. I suspect it will be good with smoked fish and if so, will be a raging triumph with the smoked salmon, bacon, salad and chutney sandwiches tomorrow (pace NS).

  2. Tania - I completely agree with your stand on VAT and the need for this generation to take responsibility and control of the serious financial situation in which we find ourselves.
    I have to admit to a recent quiet moan of my own on this subject with my Father while in Italy during the holiday, only to be told in no uncertain terms that VAT has been at 20% there since 1997!
    In fact the majority of countries in the EU have a rate the same or, as you rightly pointed out, higher than ours today. Why does the media not mention it in their reports today?

  3. I just wish some of the VAT money was being spent on our future geneations. But then that is me being bleak with the return to work I think.

    I may have a different stance tomorrow when I am not having nightmares about the future (silly me) and being scared of the cuts to provision for children and young people locally now funding is no longer ring-fenced.

    I do like to read your thoughts though. They settle in to me and help me think through these times which are hard to get my head around.

  4. Dear Tania,I read your blog daily but have never commented before (anywhere).But you are so absolutely right about VAT.I don't understand why the press is so negative about the rise either.It will be very difficult for anyone to avoid paying and those people spending most, will pay most.Surely this is good?Sue

  5. Here in South Africa we have the same "received wisdom" in regard to VAT and I have to say that I agree with your point of view.
    My husband is an amateur photographer and I always encourage him to take photos of fungi, moss, leaves and bark. Love your photos. I've been reading your post for a while now and I would love to have dogs like yours. They are beautiful and look wise and kind. Those photos of the hill may prove to be a valuable series in years to come. We have copies of some amazing photos of our suburb before our house was built and it is absolutely mind-blowing to realise how recently our landscape was changed.

  6. Well, I feel differently about VAT, although your points are certainly interesting ones. But I think you're wrong about one thing: if something cost £10 before the hike it's most unlikely it'll cost £10.25 after it. £10.25 isn't a recognised price point (neither is £20, for that matter, but never mind). It's much more likely to go up a whole lot more - say, to £10.49. And those of us old enough to remember decimalisation will find an echoing experience right here.

  7. Hurrah! I was beginning to think I was mad or stupid, this is what I have been saying for days.
    It's not like they're putting it on food or childrens clothing (ie. both pretty essential).
    Let's hope it makes people think twice about whether they truly need "stuff"

  8. I'm such a bleeding liberal that I can see things both ways. I work in retail, and I can say that without any doubt prices will be going up above and beyond the 2.5%; everyone is very nervous that the suppliers and hauliers are putting up their prices by 2.5-3%, which means by the rules of retail this will be passed onto the consumer at a total cost of 5-8% of what we are currently paying. It's a real pain to adjust prices up, and so when it's done it's done in such a way as to make the extra work worthwhile. It won't be an extra 25p on £10, it'll be more likely to be £10.99 (£10.25 and £10.49 just aren't recognized price points - even M&S wouldn't tinker with the 99p over a tenner rule).

    But, the saving grace is that I can choose whether or not I want to spend my £10.99 on something. If money's tight I won't; if I've got a bit spare then what's an extra 99p? I grit my teeth a bit about petrol though.

    Also the Pigeon was looking particularly lovely today. I know I shouldn't have favorites based solely on looks, but there's something about her fluffy ears that's terribly sweet.

  9. In New Zealand, we have GST (Goods and Services Tax). It applies to everything except financial transactions. The most contentious application is to food, especially healthy or whole foods. It was increased last October by 2.5% to 15%. It is true that the increase works culmulatively i.e. At each transaction point so food, again, can be quite inflated given transport costs etc. Overall, however, I have to say that a tax on what you consume does seem the most fair of tax systems. The debt burden is patently ridiculous, everywhere. It would be nice to have some concessions around essential, baseline items though. Don't start me on hedge fund reprobates et al. Love, love your blog, and very much looking forward to your 2011 posts.

  10. Really interesting and thoughtful comments; thank you all. Apologies for not replying to you individually. (It is late and I am tired. And there is the cricket on.)

    Despite thinking of myself as a tremendous contrarian, I always get a little bit nervous when I go out on a limb against what I am TOLD I should think. Very much appreciate that even when some of you do not agree with me, you are still so very kind and polite. (I know this sounds rather mimsy, but I am absolutely hopeless at confrontation.)

    And an especial welcome to Sue, my first time commenter. Always get very excited about new people coming to the blog.

    Also, it is particularly interesting for me to get perspectives from different places. South Africa AND New Zealand today.

    And, as always, many thanks for kind words about the canines. :)

  11. Thank goodness it's not just me! I said exactly the same about VAT yesterday...brilliant!

  12. Dear Tania. You've inspired me to try a series of photos of the view from my window, and I've created a link to your blog on my blog! Thank you for the inspiration.

  13. I am a bit ambivalent about VAT. As a percentage of income as I understand it a VAT rise will affect lower earners more than higher earners which strikes me as unfair, on the other hand the more you spend the more you should pay also strikes me as fair. I would just prefer to see tax rates rise overall particularly at the very top end plus getting rid of all the silly wheezes which seem to mean that the more you are paid the less likely you are to be stung for 40% by HMRC. And those banking bonuses make me beyond cross when I see all the things that seem to be first in line for cuts - a fantastic theatre arts project that went into schools gone in the bonfire of the quangos, my friend's job in a school sports partmnership trying to keep a bunch of kids doing sport rather than drifting off into gangs - gone despite the U turn, the local playgrounds whose funding had been cut - and there are thousands of similar examples. Depressing.


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