Skip to main content


Volume 504: debated on Monday 18 January 2010

To ask the Chancellor of the Exchequer what assessment he has made of the effect of the temporary reduction in the rate of value added tax on the economy during the recession. (311365)

The Government expect the package of stimulus measures announced in the 2008 pre-Budget report to have increased GDP by around 0.5 per cent. percentage posts in 2009. The VAT reduction was a key element of this stimulus and reduced the tax liability for both businesses and households by around £11 billion. It has benefited consumers, where passed on via lower prices, and otherwise has helped to support businesses and jobs, by strengthening cashflow and profits.