Cutting VAT
This is a really silly idea actually.
The Centre for Economics and Business Research argues for an eye-catching five-point cut in Vat, taking the rate from 17.5% to 12.5% for a period of two years. It makes a lot of sense, helping families up and down the social scale – a bigger proportion of the income of the lower paid goes on Vat – and providing small firms with a fillip. It would certainly be noticed, unlike fiddling with tax credits.
Not silly in an economic sense, rather, silly in a political sense. Because our provincial government in Westminster doesn’t in fact have the power to cut VAT to such a level. We are bound, by our real government in Brussels, to keep the main VAT rate at or above 15%.
Just another example of how we no longer have the power to do as we wish in our own country.
9. November 2008 at 3:42 pm :
This sent me loopy this morning when i read it. In the main section of the Sunday times there was not a single mention of EU restrictions, although it was mentioned in the Business section. Apparently they reckok Darling could use a temporary derogation.
OR he could just stick two finger up at slash VAT permanently, and tell the EU to go disappear up its own arse.