Nobody can have missed the economic and financial catastrophe currently hogging the headlines. We waited with naive excitement for Monday’s pre-Budget report thinking a hefty VAT holiday would encourage a seasonal sales spree.
We were sorely and predictably disappointed. Not only was the VAT reduction limited to 2.5%, but Mr Darling has “offset the VAT reduction” by increasing duties on petrol, alcohol and tobacco “by an amount which should keep the overall cost to consumers the same this year”.
From 1st December duty on a case of still wine will be £18.88. This means that duty has gone up 17% in 2008. And Decanter magazine reports that the Government is further committed to raising duty rates by a rate of 2% above inflation in each of the next four years. Which is a lot of money for the government and no help at all to the drinks industry.
It is reasonably safe to assume that when VAT goes back up to 17.5% (or higher as rumour has it) that we will not be seeing an “off-setting” duty reduction.
So Happy Christmas to you too, Mr Darling.