VAT cut is helping retailers, claims think tank

Date: 15th April 2009

The government's temporary reduction in VAT is helping Britain's retailers through the economic crisis, it has been claimed.

Figures from the Centre for Economics and Business Research (CEBR) show that annual retail sales accelerated following the introduction of the 2.5 point cut at last year's pre-budget announcement.

Considering this, the think tank has called for the Treasury to freeze the rate of VAT at 15 per cent until July 2010.

The CEBR said in a statement: "The figures are clear; the VAT cut is working.

"The rise in retail growth is even more remarkable given the economic context over this period."

It added that there had been an "immediate boost" to retail sales following the implementation of the cut in December.

Meanwhile, the government has announced plans this week to turn empty retail premises into art galleries and advice centres - a move which has invoked the fury of both the British Retail Consortium and British Chambers of Commerce.