Friday, June 17, 2011
One for you-know-who.
For those who believe the deficit is the absolute priority for economic policymakers, the call by Ed Balls yesterday for a temporary cut in VAT was never going to play well. Predictably enough, within hours both David Cameron and Nick Clegg were rubbishing the proposal in terms with which we are all now familiar â€“ "maxing out the nation's credit card" and so on. That's a pity because the thing about cutting VAT is that we know it works â€“ and it will not cost anywhere near the theoretical Â£12.5bn price tag of a 2.5 percentage point reduction in the standard rate.