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Finance Bill

Before Christmas, the Government acted promptly with temporary, targeted, timely measures to support the economy and, in the Budget, we set a path for fiscal sustainability over the medium term. The Liberal Democrat amendment proposes that an evaluation of the impact of the VAT cut be carried out. I can tell the House that on 6 March, with my agreement, HMRC commissioned a study from an independent research organisation, ORC International, whose report will be published, as always with externally commissioned research. The research will look carefully at the compliance costs burden imposed by the change and compare them with the estimates in the public impact assessment. It will also gather data about the commercial effects and the decisions that businesses took in the light of the VAT reduction, including looking next spring at the effects of the rate going back up again to 17.5 per cent. That is important, because it has always been clear, as has rightly been acknowledged during the debate, that part of the stimulus benefit of what we have done will be to encourage purchases ahead of the rate rise.