My first response to the shadow chancellor's calling again for a cut in Value Added Tax was: what to? 19%? After all, that would have been the level if Labour had been returned in 2010.
For an expert analysis of the inutility of a temporary cut in VAT, see Mr Dillow. I would only add that the last temporary VAT cut was more trouble than it was worth for small enterprises, who had to change price lists, computer systems etc. and then change them back again.
I am glad that Balls has recognised the value of bringing forward the coalition's pledged exemption of the first £10,000 of earnings from tax. However, he then spoils things by suggesting that it be paid for by extra borrowing. What happened to Labour's tradition of afflicting the wealthy? Could it be that the party is trying to regain financial support from city institutions? Our proposal is to recover the loss of tax revenue from either removing a pensions benefit for wealthy individuals or a variation of the "mansion tax". Neither of these would jeopardise UK's standing in the bond market, which an increase in borrowing would.