Looking at the VAT reduction and its timing there appears to me something of a cynical motive.
I may be completely wrong. But given that much of the mini-budget has dates that would appear to cooincide with electoral periods, it is an idea worth exploring.
I have had a job in retail, fluctuating between full and part-time employment, for the last year and a half. It is in a sector that is particularly sensitive to the state of the economy.
There has been a noticeable slump in sales this year. This is in part due to the recession, but the extent of the silence on the high street is also the result of people saving their money to buy their Christmas presents closer to the holiday.
The high street expected sales to increase in the next four weeks regardless of the PBR. Those sales will be higher this year because people are condensing their Christmas spending period. The cut therefore seems to be an attempt by the government to take credit for the actions of the invisible hand and the Christmas season. But as Freakonomics points out, correlation is not the same as causation. It is unlikely to be some sort of market rally inspired by Mr. Darling.
People spending more in the next four weeks appears more likely to be the result of Christmas than the state of VAT. The government should not be allowed to take the credit that easily.
Follow on Facebook
