VAT cut 'has not helped economy'

News Article - 15 April 2009
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The British Retail Consortium has disputed claims from the Centre for Economic and Business Research (CEBR) that the VAT cut has helped to boost retail spending, in news which may be of interest to firms looking to control costs during the recession.

Richard Dodd, spokesperson for British Retail Consortium, said he did not believe there was any evidence that last year's VAT reduction - announced as part of the pre-Budget report - produced any sales growth.

"Clearly it will have raised sales above what would have been at a lower level otherwise, that's perfectly logical, but [the CEBR's] claim is not backed up by any figures," he added.

The CEBR recently claimed that the VAT cut boosted retail spend by £2.1 billion in the first three months of operation.

It claimed that annual growth in retail sales accelerated from 1.6 per cent in November 2008 to 2.6 per cent in December.

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