Did Alistair Darling's VAT cut actually work?
The Centre for Economics and Business Research (CEBR) has today stepped forward with "evidence" that Alistair Darling's 2.5% VAT reduction last year actually saved the UK economy from a further downfall. Figures released by the CEBR suggest that annual growth in retail sales moved from 1.6% in November last year to 2.6% in December rising to 3.2% in January. While there has been a fall to around 3% in February the CEBR believe the move injected a further £9 billion into the UK retail sector.
This is one of the first pieces of good news which Alistair Darling, the Chancellor of the Exchequer, has received for some time and will no doubt be used in the Houses of Parliament this week. This is a Chancellor of the Exchequer who has been under significant pressure for over 12 months and been left to carry the can for many failed rescue attempt. On the other hand, Gordon Brown has stepped into the breach when the good news began to flow having taken a step back when the criticism was all around.
Even if the UK economy was to pick up in time for the next general election there are serious concerns the Labour Party is split down the middle with serious infighting set to explode.
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