Cut in VAT a 'waste', say Lib Dems

Date: 5th January 2009

The government's temporary reduction in the rate of VAT has been slammed by the Liberal Democrats.

Speaking to BBC Radio Four, the party's leader Nick Clegg branded the 13-month, 2.5 per cut as a "waste", stating that the funds could instead have been used to form a "fairer" system of taxation.

Announced by Chancellor Alistair Darling at his pre-budget address in November, the cut from 17.5 per cent to 15 per cent was intended to spur consumer spending.

Mr Clegg told BBC Radio Four: "We would not waste £12.5 billion on the VAT cut which the prime minister has delivered, which we don't think makes much difference."

He added that the party would instead use the money for a "green investment programme", which could include insulating hospitals schools, and other home-based energy efficiency measures.

In other small business news, the deadline for self-assessment tax returns is fast-approaching, and all submissions must be made online by January 31st 2009.