First it was Simon Wolfson, head of Next (admittedly a Tory supporter) who said the cut in VAT had made no difference to consumer spending.
Now Sir Stuart Rose, chief executive of Marks & Spencer, has admitted that the cut from 17.5 per cent to 15 per cent has “not made a material difference to our sales”. Coming from Rose – who is a member of Gordon Brown’s business council – this is rather damning.
On Sunday’s Andrew Marr show the PM was peddling the line that it’s too early to judge the impact of the cut, which will last for another 12 months – ie we are only £1bn into the £18bn pre-budget report stimulus (of which £12bn is the VAT cut).
He might have added two further points:
1] The cut may have been designed to make people buy more stuff. But if they don’t they are still left with (slightly) more cash in their pockets.
2] We don’t know whether retail sales would be marginally worse without the VAT cut.