An unnecessary reduction

You have noticed that this blog is becoming a little cynical about the government's attempts to mitigate the impending financial gloom.

You would be correct.That doesn't mean that we agree with the Cameron view of do nothing.Far from it it fact there may be a case for greater and more controlled intervention.

But what will not help is the tinkering around with financial tools and none more so than the 2.5 per cent decrease in VAT.

Over at Westminster Blog,Jim Pickard reports on the comments of former GOAT Digby Jones who says

“The accent in the pre-budget report was on stimulation of the consumer. However, regardless of a VAT reduction, people will not go shopping for big-ticket items when they are out of work.”

In my opinion,all this has done is create a great deal of confusion and administrative mess for companies.The fact that retailers are already discounting prices well below the 2.5 per cent shows the reality of the situation.

An unnecessary reduction which will be paid for in future years

He talks sense so why is he going?

I am just listening to Lord Digby Jones on Adam Boulton

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I think that for over a year we have had two distinct situations.We have a financial crisis brought about,completely by errors of judgement through greed starting in America....At the end of the day Bradford and Bingley are lending 125% of the value of a home.They are taking self certification so that people can say how much they earn and nobody need check it and you wander why people get into trouble......

Then you have the real economy.You have a manufacturer who is selling his stuff value added into China,but he needs to pay the wages and convert the materials before he can add the value make profits etc etec.

If ,because of the first crisis you are taking the blood out of the manufacturer and you create unemployment and recession.These two are coming together and we are in for a difficult 2009.

So why has this guy left the governemnt.Well he wants to spend more time with his family(fair enough) but specifically he talks of the role of the civil service in stifling any risk taking in government.

Is this where government is going?