SunnySideUp

I really didn't think it would work .... but, it seems that we have to thank the clever use of the VAT Reduction!?

"The government's much-criticised cut in VAT is working and has led to a big boost in consumer spending, according to a leading economics consultancy.

The Centre for Economics and Business Research (CEBR) says that the cut, which took effect on 1 December 2008, has led to £2.1bn of extra sales.

The centre says the growth in retail spending is "remarkable".

http://news.bbc.co.uk/1/hi/business/7995850.stm

Jamz3k

bollocks just like every single one of your posts

SunnySideUp

I suggest you send that message to The Centre for Economics and Business Research in that case ...

Jamz3k

you talk ***** FACT

but i like u

Lisawrx

iTrader: (1)

I'm no economist, but I doubt we are even still seeing the benefit of this cut anymore, anyway.

Maybe initially, people did spend more, as most places, if not all deducted the vat cut at the tills so you could see the difference, which tbf was fairly small unless you were spending a fair amount, but at least you saw the saving.

Now, all the places I have been don't do this anymore, so how do you even know you are saving anything. What's to say the prices haven't just been put up to compensate, or left as they were prior to the cut, so now you don't have the deduction at the checkout, effectively you are paying the same as when it was 17.5%.

I don't have an answer, but if people are spending more, I'm not convinced it's down to a 2.5% decrease in VAT, that we are by and large not even really benefitting from anymore.

Neoscooby

The fact that this group were the only people to support the VAT cut in the first place may have something to do with how they've worked out its a success now. I suggest you try some more independent sources

cster

I believe in fairy tales

FlightMan

Complete rubbish. Much like the measure itself.

mykp

id say its probably more down to those with variable rate mortgages whos payments have fallen spending their extra disposable income than a 2.5% decrease in vat!

The Zohan

saving a fiver on a £300.00 tv is bound to make people dash to the shops, wallet in hand!

Saving £250.00 on a new car, ditto.

Pete, you can do what you want with statistics, it may have helped busines's which is a good thing, the people on the street - very little in the way if help TBH.

The Zohan

Yes!

TopBanana

So nothing to do with the lowest interest rates on record then, or any other macroeconomic factors, and entirely because of the VAT rate cut? Don't believe everything you read.

SunnySideUp

If I believed everything I read I would have sold the Scooby ... it being the chocolate engined, unrelaible piece of 'Special Measures Needed' machine one could ever own!!

I'm just reporting something for discussion ..... for what it's worth, whatever has happened, people are out there buying houses, cars, TV's and lots of food - the recession is clearly over and most were unaffected in truth.

Next Spring we will probably all be feeling rather wealthy again and confidence will bloom eternal ... another few years of the devil you know come election time then?

Leslie

Pretty impressive that your Scooby is going so well after all this time SSuP, especially since you don't have a Kocklink, a Dawes device and you don't change the oil properly!

Some might say that people are spending their money while it is still worth something before the hyper inflation kicks in!

What I find worrying is when they find that the IMF wont lend them any more money and they are forced to tax us all to retrieve all that cash that they are peeing against the wall!

Les

Chip

Extra 2p/L on fuel again last week. NI contributions up this week. What next??

Chip

SunnySideUp

What next?

Would an end to the recession suit Sir?

Difficult choices had to be made, they were made, we avoided a depression ... history may show that we got away pretty cheap!

Snazy

lol hurrah, its a good old fashion spin thread.

I will walk the line.

YES spending is up, but NO its not really based on VAT reductions.
In the long term we will probably suffer for the VAT reduction with it being increased to a higher rate than it ever was, and probably for longer than it was lowered for.
Also with constant spending returning, they will be on the win.

I am sure some decisions made or followed by our government will have helped towards recovery. But if we are meant to believe everything they say....

No more boom and bust
The UK is the best placed country to ride out this recession
The UK will be the least affected nation in this recession

All wrong.

So any claims that it is the decision of a few people, who also made the above statements, that has helped our recovery...... im doubtful.

SSU, you speak like its all over..... For someone with such a great knowledge of such things, thats a very ignorant stance to take.

53

iTrader: (41)

Been quite nice for those of us importing car parts.

hoskib

iTrader: (1)

next? well pretty soon the VAT will go back up and you watch EVERYTHING go up at least the 2.5%. it's a great excuse. makes more tax money, we pay to get the goverment out of a hole and so it goes on.

i could count on a couple of fingers the bills that have actually come down with the VAT cut. but i'm fully expecting them all to shoot up when it goes back to normal.

out of trouble? like ****, we'll be paying for this mess for years to come.

f1_fan

iTrader: (9)

But hang on in post 10 Paul Habgood said that saving a fiver on a £300 telly made no difference hence surely the same amount going the other way makes no differerence either

Funny how the mind works isn't it?

Snazy

I think the right way to look at it is...

£5 saving is NOT motivation to spend £300
But £5 out of your pocket IS £5 out of the monthly budget.

Given the number of things you may be motivated to buy that you would not usually buy = X saving
Compared to all the items you HAVE to buy monthly = Y spending
All equated to higher monthly outgoings regardless of the fiver you saved on the TV.

Bigger picture and all (not the TV lol )

The Zohan

If i was considering buying a TV, etc would a fiver saving be the decider, i doubt it. Given the current financial climate i might hold off.

The cutting og interest rates was the way to go with people having more 'disposable' income.

However, the fiver saved wil come back and bite us on the a$$ in several years when VAT goes up to to 20% to make up the shortfall.

cutting tax and putting money in the pockets of the masses is a better approach - IMHO

Snazy

Totally agree. People not seeing far enough ahead down the road to realise that its decisions like that which the tories are going to be left to make in a year or so time. Instantly making them the villans in the eyes of the blinkered masses.

SunnySideUp

Come on, if we truly worried about 2p/Litre on fuel we wouldn't be running cars which struggle to reach 20mpg ....... now, would we?

We would be running diesels returning 60mpg - the equivalent then of £1:75 a Gallon

EddScott

This is clearly the case. Its almost a no brainer that Labour will be ousted. Conservatives will be in and they have one hell of a sh1tty stick to deal with. They aren't magicians so the problems we have now won't just disappear. Conservatives will blame labour for the hand they were dealt. Labour will blame the conservatives for not being able to manage and before you know it Labour will be back in.

They know the next good number of years are going to be poor so lose the election on purpose.

As for the subject, the VAT issue is pure garbage. Low interest rates have increased spending and nothing else. You watch the masses fry when they go back up to 5 or 6%. And no they won't hit double figures. That is utter scare mongering.

Chip

I do!

Chip

SunnySideUp

Stop moaning then!!

chocolate_o_brian

iTrader: (22)

Pete, your car supposedly does 38mpg so you say.

The sales are up due to every bugger having permanent sales on, which are usually a little more than 2.5%. They just happened to exist at the same time the VAT cuts cropped up.

But don't biased statistics get in the way of some cut 'n' pasting from the BBC website fella

SunnySideUp

My car does about 35mpg ..... that's if I have a 45 Litre tank (which I think I have) - but, some on here say I have a 60 Litre tank.

I get 350 miles from a tank.

StickyMicky

The general public seam to want to think they are getting a better deal before they will part with the cash.

We had a little brain storm at work and figured we would try out a new technique to boost sales, we put up banners and posters telling everybody about our new "special offer", and watched them flood in, only the price is the same that it has been for the past 2 years?

I still can not actually believe that worked