VAT’ll do nicely?

Is reducing VAT on ‘non-essential’ goods from 17.5% to 15% really going to do any good?

Say I see an mp3 player I fancy that retails at £100 plus VAT today – that’ll cost me £117.50. If VAT then gets reduced to 15% then it’ll cost me £115.

Is that going to make me wait to buy it?

Is that going to make me continue spending my money on high VAT-rated items?

I think not.

Given that Alistair Darling has stated that if you give money to the poorest people then they’re more likely to spend it – and I find that not only cynical, but deeply offensive – wouldn’t it be better to give them more money via tax credits, for example, that they’re more likely to spend?

David Cameron’s recent comment on the government’s measures to rescue the economy made me laugh:

‘The government is giving with one hand and taking away with the other’

No change there then…

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