Things just don’t get better for Gordon Brown do they? As the economy continues to collapse around his ears, the unions bein reflexing their muscles and unemployment continues its steady course to hit record highs it seems Europes leaders are turning on the Prime Minister too.
As many of you will be aware I am and have always been a great fan of Nicolas Sarkozy. This sentiment was reinforced today when he dared speak out and say what the rest of Europe and its leaders are thinking: Brown is screwing up big time. In a debate on French TV Sarkozy said the UK’s VAT cut had “absolutely not worked”. He went on to explain that “Britain is cutting taxes. That will bring them nothing. Consumption continues to decrease,”.
I have never been a backer of the VAT tax cut. For a start VAT is only levvied on luxury goods anyway so the cut, in a time of economic slump, will not motivate people to buy more luxury items but it will impact on company profits making life more difficult for the companies and government revenue. What was even more perplexing was the fact that it came in around Christmas. Now forgive me but Christmas is one of the few times of the year when people will spend a bit more, they will go for luxury items. Had Brown left the VAT rate as it was then the increase in profit for companies over the festive period and the money raised in VAT for the government would have been much higher and making us a bit better prepared to tackle the slump now.
Im not saying reversing the VAT tax cut would have halted the economic crisis. Of course it wouldn’t. What I and leaders like Sarkozy are getting at is that it was nothing more than a costly publicity stunt that has been proven to fail dramatically and other Europeans shouldn’t follow Brown’s lead. Sarkozy now joins the leaders of other European countries like Holland and Germany who have expressed their lack of faith in Gordon Browns plan to tackle the economic crisis. Suddenly the Prime Minister seems that bit more isolated.