An unnecessary reduction

You have noticed that this blog is becoming a little cynical about the government's attempts to mitigate the impending financial gloom.

You would be correct.That doesn't mean that we agree with the Cameron view of do nothing.Far from it it fact there may be a case for greater and more controlled intervention.

But what will not help is the tinkering around with financial tools and none more so than the 2.5 per cent decrease in VAT.

Over at Westminster Blog,Jim Pickard reports on the comments of former GOAT Digby Jones who says

“The accent in the pre-budget report was on stimulation of the consumer. However, regardless of a VAT reduction, people will not go shopping for big-ticket items when they are out of work.”

In my opinion,all this has done is create a great deal of confusion and administrative mess for companies.The fact that retailers are already discounting prices well below the 2.5 per cent shows the reality of the situation.

An unnecessary reduction which will be paid for in future years