Guido has been reporting on the Office for Budget Responsibility’s (OBR) pattern of appointments for quite some time. They’ve just added yet another left-leaning, high-taxing adviser to their advisory panel.
Rita de la Feria is a left-wing professor of law, and self-proclaimed tax law virtuoso. She claims she inspired Uzbekistan to adopt her “progressive“ VAT system, which involves charging VAT on everything, burdening the majority of people with yet more taxes – and then getting the poor to reclaim VAT. She believes – according to her tweets, Corbyn asks the right questions, she was jubilant when Farage lost an election – accusing him of advocating the politics of fear. She of course describes Farage and Trump as “the extreme right”. Unsurprisingly, de la Feria is fervently anti-Brexit, complaining particularly about the perceived loss of tax revenue due to Brexit. One would think that fewer taxes on goods during a cost-of-living crisis would be a welcome development, apparently not in her book, which by the way is titled “Taxation and Inequality”.
The appointment of de la Feria stands as yet more evidence of the OBR’s ideological group-think. They’re proving yet again they have an agenda which is reflected in the mindset of the people they hire.
“I’ll give you this assurance, they will continue with the same programme, cutting taxes, simplifying regulation as much as possible, taking advantage of all our new regulatory freedoms, getting rid of every encumbrance from solvency to MiFID to VAT on fuel – turns out to be easier than we thought.”
Anyone else starting to get the sense the Tories are really going to miss this guy?
Rishi Sunak has been calling tax cut promises by other candidates “a fairytale”, going as far as to call Truss’s plans to use fiscal headroom to deliver £30 billion of cuts “immoral”. So what was it about the polls stubbornly refusing to move in his favour that caused him to pull off a “screeching U-turn” last night and announce a new policy to scrap VAT on energy bills next year? At a cost of £4.3 billion…
His new proposals will kick in if the energy price cap rises above £3,000, as is expected, allegedly saving the average household £160 by shifting the bill onto the national debt to be paid off by the next generation. Something he claimed previously was immoral. Not only did this announcement tonally represent a change of strategy, it particularly jars with an answer he gave to an audience member during Monday’s BBC debate. Where he repeatedly refused to commit to help until we learnt for certain what the new energy cap will be:
“We’ll have to see what the price cap actually is when we get there, as we heard we don’t know quite where it’s going to be… I think we’ve had this problem where we know energy bills are very volatile and we need to actually now see where they’re going to end up at.”
More awkwardly, in February Rishi took to the Commons to denounce the policy – then suggested by Labour – as it would “disproportionately benefit wealthier households”
“There would be no guarantee that suppliers would pass on the discounts to all customers, and we should be honest with ourselves: this would become a permanent Government subsidy on everyone’s bills, a permanent subsidy worth £2.5 billion every year, at a time when we are trying to rebuild the public finances.”
Last night Liz-supporting MP Mark Jenkinson really stuck the knife in – by tweeting the infamous scene of Theresa May shouting “Nothing has changed!”
The cost of living crisis is finally hitting parliamentarians where it hurts, after it was announced that there will be a catering service price hike across the estate from October 1st. A sign erected in PCH this morning explains that VAT will increase on food items from 5% to 12.5% “… with the exception of milk, fruit and sandwiches”. The sign also warns that VAT will return to 20% from 1 April 2022. Won’t be long before the electricity starts cutting off…
Emily Thornberry was on LBC over the weekend talking about the impact of VAT on people on middle incomes. An important issue, though it was illustrated by Thornberry with a rather odd example:
“Things like VAT are things that people on average incomes are hardest hit – we all have to buy milk.”
Milk is zero-rated. No one pays VAT on milk. This is a more embarrassing mistake than not knowing the price of a pinta…