16 June 2011
In response to Ed Balls' proposals for an emergency VAT tax cut:
Tom Clougherty, Executive Director of the Adam Smith Institute, says:
“How ironic that Ed Balls – the man who wanted to extend the reach of the deeply anti-growth 50p tax rate – has suddenly decided that tax cuts would boost the economy.
“But today’s announcement is pure politics. A temporary cut in VAT would do little to boost confidence or growth. People aren’t fools – they know that you can’t just borrow more, spend more, and raise less without it coming back to bite you further down the line.
“A growth agenda that coupled lower taxes with less red tape and less wasteful spending would be a good thing. But the shadow chancellor’s reckless, have-your-cake-and-eat-it too approach to the economy would do nothing except march Britain further down the road to a sovereign debt crisis. It would damage confidence, not boost it, and destabilise the economy, not stimulate it.”