The cut in VAT

[rov1200]

Will Gordon Brown's cut in VAT work? At �12 billion its an expensive gamble. President Sarcozy of France said it won't work.. Who do you believe?

http://news.bbc.co.uk/1/hi/uk_politics/7874648 .stm

[pbeach]

Neither of them, because they are both Politicians... ergo they are liars.

[Rollo]

They should have kept the VAT rate at 17.5% - and used the �12 billion to fund the bonus payments that are going to be paid to the employees of the banks the the state now effectively owns.

[rov1200]

I take it Rollo you work for one of the banks?

[Rollo]

I don't work for any bank. I just pay them money.

[rov1200]

This reduced VAT rate is not set in stone. If the powers that be realise its a mistake �billions could be saved by scrapping it. It takes a brave man to admit to a mistake though!

[Gromit]

The truth is, no one knows whether a VAT decrease will work or not as we have not been in this position before.

Anyway, it is just one of a series of measures. No one thing is going to save the economy. The Government has presented a package of measures. There are good reasons for each one, but inevitably, not all of them will work.

Different countries will come up with different packages. VAT is significantly higher in France than here, so they might prefer to leave that alone.

[Rollo]

What makes you think that the muppet politicians who were in charge when the lack of proper regulation allowed the situation we are now in to occur, are the people who are now going to come up with the solutions to the mess they allowed to happen?

[rov1200]

I agree there are other measures Gromit but it seems someone in the treasury has not done a cost/benefit analysis and �12bn is a lot to lose. But looked at simply this country is going downhill because consumers are unwilling to purchase.

An exception to this is the housing market which recorded an increase of nearly 2% after steady falls. The pound shop is hardly likely to generate a recovery but items like cars could have an effect. The government is examining ways to trade in old vehicles for new greener models so there could be some hope there.

[rov1200]

Green shoots in one sector, the housing market! Could it be due to the low interest rates plus the drop in prices over the past 6 months?

If you used the same strategy in the car market, an essential to most people, where could this lead to? ie. Reduced prices, cheap car loans, a greener alternative to save the planet, seems like a win-win situation. Money is used from the �12bn saved on the discredited VAT reduction.

[rov1200]

http://www.cleangreencars.co.uk/