Putting up VAT to 20 per cent is more or less equivalent to putting 3p on the basic income tax rate. Except that unlike income tax it is aimed at those who are poorest, even those who don't earn enough to pay income tax. And it also hits consumer spending, which is not too good an idea in a recession.

Putting 3p on income tax would have been a much better option. Even wiht that it would still have been at a pretty low level, lower than it ever was under Thatcher.