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Value Added Tax

Clearly, supplementary measures are needed to deal with pensioners and people who are not in the tax bracket. I was referring to an overall package that would be a good deal fairer than the one proposed by the Government, and more effective in the long term because it would be built into people's expectations. I finish by continuing a point that I made on Monday. The argument about how to stimulate the economy is moving on very fast. We are talking about cuts in interest rates and about fiscal policy. The Americans are already talking about quantitative easing, which is printing money—that is, dropping money from helicopters. That is the kind of environment that we are getting into. When we reconvene in the new year, I expect that the debate will have moved on to more dramatic and potentially dangerous departures in policy. Although the statutory instrument will undoubtedly inject some demand into the economy, it is seriously defective and we intend to vote against it.