Chancellor tells Today he’ll reveal more about policy response to a possible No Deal in speech (though won’t reveal what the plans are either to get a deal or to get no deal). Operation Kingfisher has been prepared. But he also mentions Bank of England’s own independent response
The obvious thing here would be some sort of contingent emergency Budget after October 19th but before October 31st. Could perhaps lean into scope for tax cuts in areas currently aligned under EU rules, such as VAT.
Getting such a Budget through Commons would be another matter.
Getting such a Budget through Commons would be another matter.
First thing to say - retail lobby did ask for action on VAT (and business rates) at a meeting with Gove a fortnight ago to help mitigate a “chaotic no deal”... though they stressed getting a deal was top priority...
In situations like this in past VAT cuts have been favoured because they can be enacted immediately - as then Chancellor Darling said in PBR 2008 - “timely, temporary and targeted” - with an immediate impact to help mitigate inflationary impact of No Deal Brexit/ sterling slide..
Problem though is that it won’t help with basic food prices - as most of that is already zero rated... and super expensive £7 billion a year for 1% point off standard rate.
And as @shjfrench points out - it doesn’t need to be passed in the context of an entire Budget. VAT can be changed by statutory instrument - far simpler for No 10 yet to win a vote. tho Commons could decide vote against such a move, on basis it has already mandated extension.
other aspect is to do something else with VAT only possible after No Deal. Fuel promised by Vote Leave, but are others...
overall tho VAT cuts requested, can be done immediately, for a year without Budget, but £££.
PS look who’s been to the cash & carry
overall tho VAT cuts requested, can be done immediately, for a year without Budget, but £££.
PS look who’s been to the cash & carry
