Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of a short term reduction in VAT on the economy.
VAT is an important source of revenue for the Exchequer, raising approximately £132 billion in 2018/2019. This plays an important part in funding the Government's spending priorities including hospitals, schools, and defence.
Reducing the standard rate would come at a considerable cost to the Exchequer, and that cost would have to be balanced by increased taxes elsewhere, or reductions in government spending. Therefore, while all taxes are kept under review, there are currently no plans to reduce the standard rate of VAT.