The temporary VAT reduction from 17.5% to 15% is estimated to cost £12.5bn.
I doubt it’ll have much of an effect – I’m definitely not going to splash out on huge Christmas presents just because prices come down by 2.13%.
Also, lots of shops have significant problems already, and they’re not going to pass on the 2.13% if they can help it. Sure, many of them will have to reduce their prices to attract customers, but they would’ve done that anyway even if the VAT rate had stayed at 17.5%.
As far as I can make out, the cost of £12.5bn works out as £205 for each person in this country.
If the government had kept the VAT at 17.5% but instead sent everybody a cheque of £205 for Christmas, it would have lead to much more spending.
I’m pretty sure that if the six of us had received £1230, we would have spent at least some of it on bigger presents.
Can’t this government get anything right?