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Government Capital Expenditure

I am baffled that the Minister—or, indeed, the IFS, if that is what it said—thinks that the VAT cut made a major difference to the UK economy, because it was less than 1 per cent. of GDP, and a substantial fraction of it flowed straight out to imports. I think that we all know, from the experiences of our local shopping centres, that much of it was completely lost. Most of that VAT cut finished up in increased margins for retailers, which of course has some kind of indirect economic consequence, but not very much. It is difficult to see how it could credibly be argued that the cut had a major impact in staving off recession; I simply do not believe it.