They say a leopard doesn't change his spots and so under pressure Gordon Brown reverted to type. Tax and spend, tax and spend. The only variation being it is now Spend and Tax, Spend and Tax!
If you were particularly devious you'd say Gordon was digging as big a hole as possible for the economy so that when the Tories finally do take over in 2010 they will be faced with years and years of economic hardship to pull the country round again. I don't think there has ever been a Labour Government that hasn't left this country in a financial meltdown. We might even soon be reminiscent for Healey and Callaghan! All they did was ruin the economy, they didn't mortgage the future as well, which is exactly what Brown and Darling have done. I note it's all gone very quiet on the PFI Front! another source of future pain, Gordon's "brilliant" move of funding the public sector without it appearing on the books, but which will need to be paid for bu our children (and probably their children too).
The much trumpeted cut in vat also comes with a hidden sting. I'm not sure how much difference a 2.5% cut will make on the High Street when most shops I visited this weekend already had half price sales going on. Several even had "additional 10% off this weekend" so if the shops have cut by up to 60% already and we're not buying will the vat cut make us change our mind?
Of course if you're a taxi driver, a road haulier, bus company, or indeed anyone VAT Registered who travels for business then the VAT Cut is BAD NEWS. The cut in VAT on fuel is being matched by a corresponding increase in fuel duty to keep petrol prices the same (and of course keep money coming in to the government). Unfortunately for taxi drivers, hauliers, etc VAT is reclaimable but fuel duty isn't. Hence the cut in VAT will actually cost Taxi Drivers, road hauliers, bus companies, etc more money. The same applies to the pub trade I think as the VAT cut there will be matched by an increase in alcohol duty, hence overall the effect is to cost the publicans more since the level of reclaimable VAT drops but the level of non recoverable duty is going up.