Ed Balls has called for a temporary reduction in the rate of VAT to boost the economy. What is it with Labour and the VAT rate ? Is there sound evidence that the last temporary drop had a great effect ? I remain convinced that the best way to boost the economy is to build more houses, particularly low cost ones. This would create work for people who spend most of their incomes and therefore would have a good multiplier effect. It would provide much-needed housing. The government could stimulate the process through action on the banks' failure to lend to anyone without a 20% deposit.
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