Freethinkeruk’s Weblog

UK Political weblog

VAT Cut?

We only have to wait until tomorrow (Monday) to see how the Government will introduce measures in an attempt to boost the economy and help to take the edge off the recession. There is speculation that Alistair Darling will cut VAT from its current 17.5% to 15%. Now I am not an economist, I’m just a simple soul looking at the proposal in a simple sort of way. If I was thinking of buying an article currently costing £100 + VAT that’s £117.50 it would actually cost me. If I was thinking to myself that I couldn’t really afford it or perhaps I aught to wait a bit to see how things go, would making that price £2.50 cheaper persuade me? I think not!

I do think that this Government has handled the crisis rather well so far, although they should have seen it coming and prepared for it. However if what seems likely to be a VAT decrease in tomorrow’s statement, this will be a waste of of money in the order of £12bn doing little to stimulate our economy and if anything will benefit mainly foreign industry.

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