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Value Added Tax

But the key point is that a typical family spends £900 per month on VATable goods, and for them, if the reduction is fully passed on, the tax cut means that their spending last month would leave them an additional £20 at the end of this month, and every month to the end of this year, or—as my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) said—almost £300 in total. That is a fair way to deliver the stimulus because lower income households spend a larger share of their income on VAT than higher income households. It is particularly helpful for families on a tight budget and it will provide the vital stimulus that we need.