Temporary tax cuts ‘will not benefit shoppers’

Plans to return the VAT tax rate to 17.5 per cent will only cause businesses and consumers to restrict their spending, one expert has suggested.

Matthew Elliott, chief executive at the TaxPayers’ Alliance, stated that the general public may be forced to stop purchasing because they fear increased taxes in the future.

He remarked: “The government needs to cut [public] spending so that it can bring down the deficit and start putting in place tax cuts to permanently ease the burden on ordinary families.”

As opposed to raising taxes, Mr Elliott added, Labour should be reducing them further to raise consumer confidence.

By reducing the deficit, he commented, ordinary families could be relieved of financial pressure, which will benefit the economy more in the long term than temporary tax cut measures.

His comments come after it has been widely reported that chancellor Alistair Darling intends to raise VAT levels from a reduced rate of 15 per cent in December.

By Francis Finch

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