When wil the media give the public the real reduction of reducing VAT to 15%. This does not mean a reduction of 2.5%, as the price we pay at present includes 17.5%, therefore it represents only 2.12767%.

Paul Jakeman, Dornie, Scotland

I own a medium size online mail order company...I have to pass the VAT reduction on because all my retail adverts are priced as with and without VAT prices....off to bed to contemplate the work involved in repricing 10,000 plus prices this side of Christmas....a ridiculous experiment!

Dave Elderfield, Faversham, UK

Many retailers have 'price points'. An items deemed to be worth about £10 will be priced at £9.99. This has been going on for years.

Retailers wont change the price to £9.77 just because VAT is less. The price will stay at £9.99.

Basically this will just give shops 2.5% more profit. Its wrong

Andy K, Southampton,

I don't see the point of cutting VAT. It won't help with the cost of food, gas or electricity. Retailers will either have the costs of repricing their goods, or more likely won't bother to change the prices. I would prefer to see a reduction in the rate of income tax or higher tax thresholds.

Dee, Lincolnshire,

I would say the 2.5% VAT cut is the worst option . Even if retailers pass on the cut (I do not think they would bother), I would never do a £50 shopping motivitated just by £1.25 saving. How can such a bad idea be produced from our 'intelligent' Treasury people who intend to rescue our economy !!!!!

Jeff, NOttingham, Nottinghamshire

Sorry, but Brown doesn't have a clue. Totally out of touch.

derek, Bristol,

In these tough times companies are looking to reduce costs by off shoring. Is the impact of this on the UK economy and long terms skills retention being managed? Are there any Corporate Social Responsibility constraints that could be strengthened that will 'protect' the uk economy?

Adrian Smith, Dorking, UK

This Keynesian pump-priming cobblers was tested to destruction in the 50's, 60's and 70's. It always resulted in no discernible effect on the slow down but higher tax and inflation - and Brown is supposed to be an historian !

Monetarism was a desperate effort to get out of the Keynesian dead end.

L.Stewart, Cranbrook, UK

"rescue package"???

My god, I'd hate to fall into river with Brown standing there. I'd be shouting for the lifebuoy, and he'd throw in a Hula Hoop.

Laura Roberts, London, UK

Consumers should not have to pay vat on gas and electricity,nor household insurancepoliciies...i also think taking troops out of Iraq and Afghanistan essential
actually water,gas and electricity should be in public hands and subsidised as essential for us all

Jean, London, England

why do we bother listening to what the eu says anyway, stuff them, if we want to set VAT rates at 10% just do and if the eu say we can't let them try come collect the money. they haven't had thier books signed off for over 10 years so we should just say NO money until your books are signed off

tom, london,

It remains to be seen what will actually be announced but enforcement of greater flexibility by the banks to assist small and medium size enterprises is a must if the businesses are to remain viable and keep their employees in work in order to survive the worst and be there for the upturn.

Arthur, Isle of Arran, Scotland

Campbell Jones, Ludlow, UK
That was 20 years ago. Gordon Brown hasn't reduced it much in the ten years he has been Chancellor of the Exchequer has he?

Richard, Alicante, Spain

Again, basic pensioners will miss out on any of Darling's rescue package. We don't often buy items that attract VAT since food and energy are our main outgoings. However, it is a reasonable and considered package. A great deal of the public spending should go the building of lots of council houses.

Doug Harkess, Bristol, UK

Get rid of VAT altogether, it's like an insidious disease.

Take some tax off diesel fuel. All goods are delivered by diesel fueled vehicles. Lowering the cost of this type of fuel will lower the cost of living over night.

Peter, York, England

Won't help those ex-pat pensioners who I see here counting their cents of Euro to buy a cup of coffee, who have been hit by raging inflation and a 25% devaluation of the pound together with a prospective annulment of any savings income they might have had. Not to mention the private pensions robbery

Richard, Alicante, Spain

The British government is conducting a series of bail-outs. Each bail-out is rewarding recklessness by getting someone else to pay. Once the reckless have been bailed-out they will be even more reckless the next time around. The British taxpayer is going to be drowned by higher taxes.

Costas, Cyprus,

So will we be seeing the likes of 99p shops and pound land changing their names to 97p shops and 98p land,,,,,,

Sam Brown, Caithness,

I think it would be better to raise the tax threshold at which people would start paying tax because they would see the benefit in there wages,cutting 2.5% off VAT would not make people go out spending.

gary, hornchurch, england

Has everyone forgotten how vat got to be 17.5% ?

Geoffrey Howe more than DOUBLED vat from 7% when the Conservatives were in government.

A party of low tax my XXX

Campbell Jones, Ludlow, UK

Brown has emptied the bank with his ID card scheme, his NHS computer , quangos and hundred of thousands of extra bureaucrates.

Britain is running a massive deficit which we will need to pay back, and his answer is to run up the credit card a lot more

Please God free us from these people

Mike , Larne, Northern Ireland

In 18 months the economy will be recovering whatever the Govt does now, ergo Broon will be able to claim the credit for actions now and con the electorate into giving him a 4th term. Any honourable CEO responsible for such a mess would have resigned or been thrown out. Time for an election!

Stepan, Glasgow, UK

The critical aspect is to keep jobs. Small businesses keep jobs in recession, large ones downsize hugely.

The EC suggests countries help small businesses by reducing VAT on service to 5% for this group. Other countries are doing it - but not the UK - YET.

MORE JOBS; MORE FOR YOUR MONEY

Hendy, Leek,

Promises from Gordon Brown - they will turn into lies and costs as they always have.

Peter, London,

The country is in debt. Brown does not include 800billion of PFI - bringing debt to 60% GBP. He should have saved in good times, not borrow. Best reduce rates and get credit to small business - but Brown hates small bsuiness and middle calsses with vengence as tax policies show.

Ricard Brown, KL, Malaysia

I've got a free solution.
Force all 90 institutions to cut savings rates back to BBR and cut mortgage rates, many of which yet haven't been.
Result? Savers withdraw money and start to spend. Borrowers, including the beleaguered BTL, find they can afford payments and repossessions slow dramatically

Sid Fletcher, Derby, UK

Cut middle income tax. These people drive the economy and these are the people worst hit by the property market. Also cut council tax by at least 30%. They just put the cash in Icelandic Bank's instead of investing it back in the people they steel it from.

Mark, Norwich,

OK A few quid off an imported flat screen TV. Shopping centres full of imported goods.Record balance of payments deficit, highest levels of personal debt, job losses, pension schemes ruined (except for the public sector and MPs), Blair's war, foreign owned power suppliers, Brown's Britain.

mike jewkes, hinckley, leics

I agree with all the comments here. A 2.5% reduction in VAT will make no difference at all to peoples spending. Companies will continue to charge what they can get away with i.e. £9.99, they will NOT reduce prices by 2.5%.Cut interest rate and have a flat tax of 20% onearning over minimum wage.

Keith, Ipswich, Suffolk

If 2.5% reduction in VAT is so insignificant, I don't understand why the government doesn't simply RAISE it by 2.5%. After all, it's such a small amount on the price of an item that it apparently won't be noticed by the public, and will swell the treasury coffers by £12.5bn. Jobs a good 'un!

David Andrews, Northa,

If shops do pass on the saving to customers, and the effect is prices falling by 2.5%, isn't this going lead to the dreaded deflation rather than inflation going into 2009?

Mark, Coventry,

The Asset sales are interesting: selling off while borrowing sounds desperate. A 2.5% cut in VAT is hardly going to encourage me to spend, and will companies pass on this cut to the consumers anyway ?

john, london,

Get rid the TV Poll Tax; Reduce the Council Taxes, Reduce the Fuel Duty; Reduce the cost of Gas & Electricity especially when they are pegged to the cost of an oil barrel which is now below $50...these are the sorts of things the government should be doing.

Louis, Liverpool, UK

Yes, but whose going to pay for all this!!!!

Callum, Liverpool, UK

So something in the shops with a price point of £19.99 will immediately get marked down to£19.56 will it? Brown and Blair have destroyed the country socially and economically. Housing primes the pump so cut int rates and also allow domestic property into SIPPS as planned before the shambolic u turn

Trevor Brown, Crewe, England

What an absurd waste of time and money. This cut in VAT will not make people go out and buy more. It is ludicrous to think this. The greedy companies will only put their goods up in price anyway. The best thing to do is give a large tax rebate to everyone in a lump sum payment. That is the best way.

Andrew, Chorley, UK

This proposed cut shows the folly of a Government Policy that relies on tax incomes to support it. The City which is the biggest source of tax revenues is reeling and job cuts in that sector where alot of consumer spending comes from will diminish further. 2 1/2 pct is tuppence in the pound great!

michael, chelmsford, england

Whilst any reduction in VAT is to be welcomed, it only makes a difference of £2.12 per £100 spent, therefore targeting those who have money to spend in the first place. What about those on low incomes who simply don't have the sort of money where this reduction will make a significant difference?

Steve, Croydon,

"Designed to stimulate consumer spending." It won't make any difference! A cut like that isn't enough, and you can bet firms won't pass the cut on.

It just increases the profit of the retailer, they won't pass it on. What the hell is wrong with this government?

Tom Franklin, London, UK

Were going to Hell in a Handcart! Let the property bubble deflate and learn from the mistakes that were made. Forcing banks to lend at low margins to bad risks is what made this problem so why are the Govt so intent on forcing our banks to do it again....?

neil lark, benfleet,

It's not the £100 purchases that are going to make the difference here - it's the thousand pound plus ones. If you are planning to spend that sort of money anyway, are you really affected by the recession? So therefore - who's going to really see the benefit? Not those that need it! Not impressed.

Mike, Southampton,

Food is zero rated, energy (electricity, gas etc for private use at 5%) anyway. So basic essentials will not be affected. Reducing the standard rate to 15% will have little impact, and meaningless to those unemployed or fearing for their jobs.

John, Bangor, UK

1. Shelf prices include VAT. My prediction: prices static, VAT element reduces, traders profit increases. Benefits businesses, not the consumer.

2. VAT is a tax on luxury goods - how does this target the benefit at those on the breadline?

3. I'd rather see 2p off the basic rate of income tax.

Claire, London,

If your serious about getting money back into the economy then pull the troops out of iraq and afganistan ,this will save hundereds of our peoples lives and allow the billions spent over there to be given back to our own people.Troops will be out eventually -do it now and save lives and money !!

andrew ward, leeds, w yorks

Wow, a 2.5% discount. I doubt that would "strongly encourage" people to rush out and spend.

Also will shops really pass on the cut or just use it as a means of boosting profits?

Chris K, Cheltenham, UK

Pensioners are let down yet again

david davies, Torremolinos, Spain

Whoppee do. Brown the person who is the architect of this misery, decides to cut VAT. Does he not understand that people are losing there jobs and they have no money to spend! FSA was his brainchild, he was only telling us all last year what a wonderful inventive banking system we have. REALLY!

steve tea, manchester, cheshire

What a ridiculous proposal! Retailers will just pocket the difference. It will make virtually no differnce at all. Pathetic.

Mike, London, UK

Pathetic, £2.50 in every £100 what a bunch of prats. A great big joke dreamed up by the world biggest Joker and his puppet man. The best way out of this current crisis is to adopt a flat rate of tax, 20% for all and remove people earning under £12000 per year out of tax completely. wage/100x 20 easy

David Stephens, Worcester, United Kingdom

In a deflationary environment, prices are FALLING in their own accord: There are no incentives for businesses to pass on the VAT cuts. Untargeted VAT cuts prolong the agony of failing business- will be used to pay off other debts.

It does not put money in the hands of consumers.

peter, Birmingham,

I will now rush out to the shops and spend £100 and save £2.50 NOT the retailers cut prices by 10% 20%. You need to give people a tax rebate. Give everyone on on Tax credits £200 they will spend it

Michael Gunning, Portsmouth, UK

A reduction in VAT is a good first step in the right direction. The next step should be to reduce the cost of employing staff, reducing employer NI contributions would help keep people in jobs! The government must cut public spending to allow resources to flow to productive parts of the economy.

Phil, Watford,

Muppet dreamer Brown gets it all wrong yet again lowering vat by a few percent is a waste of time.we need serious cuts in heating and electricity and council rates.

dee, ipswich, england

Surely if unemployment is on the rise and predicted to be near 3 million in late 2009 a VAT cut is not the best move. If people who have money spend it it should be subject to the normal, if not inflated VAT, as then the money taken can go towards supporting the unemployed in our welfare state.

James Foster, Cheltenham, United Kingdom

you cant go back into the shops when you have no money. When will the VAT cut happen on the 1st November, The shops will be empty this week . Brown and Labour have lost the plot. In the Summer there will be riots in this country, against the banks and politicians

Michael Gunning, Portsmouth, UK

Another giveaway to big business! Of course they won't adjust their prices down, thie VAT cut will just improve margins! Once again, taxpayers will later be asked to fund the expense! Politicians seem incapable of grasping the reality of the situation - ordinary people have no cash left! Help them!

steve, Pau, France

Cutting VAT simply will not work. Retailers & businesses will find plausible economic arguments for not passing on the reduction to consumers.

Peter Brown, Toulouse, France

You are right Barbara, the average member of public is imposed with a tax when extending or improving, yet the large housebuilders pay no vat at all, this is not a level playing field, nor is it a fair tax

jP, manchester, uk

When builders, build a new house, they do not charge v.a.t. on the work they undertake. I feel certain that by extending this rate to include extensions and building maintenance work this would encourage people to take advantage of a cut of this size and therefore, stimulate the building industry

Barbara, Hereford, U.K.

Most expensive items (£100+) in the shops are sold in multiples of 10 or 50 pounds. A 2.5% decrease in VAT is insignificant and will not be passed on by retailers. They will adjust their pre-VAT prices up accordingly and not pass the savings on.

Alex, London,

The difference in VAT will simply be pocketed by business.

The consumer will see no svaings whatsoever.

Peter MacKay, Burton on Trent, UK

A retailer selling something at £9.95 isn't going to change the price to £9.74 - they will carry on selling at £9.95 and keep the difference, hence you and I will be no better off. When the rate goes back up to 17.5% , that will of course make a nice excuse for price rises all round. A poor idea.

Ian, Bristol, UK

A reduction in VAT of 2.5% is so trivial as to be absurd. It will add to business costs though in implementing it.

Tom, London,

they arent tax cuts they are just rescinding promised rises.and vat is a joke, how can £2.50 off a £100 product alter a decision to purchase or not? never mind the fact that this recession should be a chance to address the fundamental weakness of our economy.we need R+D spending not shopping.

will, grimsby, uk

I am sure the public will apreciate having an extra £2.50 a week to spend by keeping the £120.00 bonus (but what's the betting the chancellor will remove it through fiscal drag)

And the extra £10.00 a week due to VAT changes will be VERY useful - I don't think so.

Chairs and Titanic anyone?

John Wood, Hull, BR

Here we go again. VAT is a tax on buying, purchasing. What about those prudent people who do not care to buy too much at this precarious time? They get nothing and no incentive to save. So the suggestion is go and buy stuff and save a tenner a week on purchases! Oh yeah, that'll do it!

Billy, Bangkok, Thailand

The people to suffer will be those who lose their jobs, so any funds should be aimed at keeping businesses afloat (e.g. scrap employer's NI). Encouraging spending is what created this mess. And some repossessions - forcing people to down-size - is necessary to return house prices to a sensible level

John, Manchester,

If this is "IT", it is very dissapointing, reducing VAT puts money into traders hands. What is needed is something that puts money into the hands of PEOPLE. Removal of stamp duty upto £300K (3yrs?) and smoothing and lowering thereafter would be better. House moves stimulate swathes of the economy.

David Raynes, BATH , UK

VAT reduction is going to COST our company THOUSANDS. We will have to take our shopping cart off air while we emply a web designer to make the changes to the website.

Plus all our stationary will have to be changed as they all say VAT at 17.5%. TONNES of paper will have to be scrapped.

cassie woods, Peterborough,

VAT cuts have no place in a robust economic strategy whilst in recession.

Get rid of it completely, permanently. The overheads in terms of accounting detail, time and money of a business merely collecting and passing on this tax for the government is insane and immoral.

Scrap VAT for good.

Laura Roberts, London, UK

How about selling off the BBC to private sector and thereby saving each of us £138 every year?

kaliappan, cambridge,

Doing nothing was always the best option and it looks like they've taken it. The VAT cut is a waste of time. Shops are all having sales so what difference will a couple of percent make? The admin of changing will cost more!

Kieran, London,

A 2.5% tax break. Woo hoo. You sure know how to get people into the stores Gordon. Next!

Dan, London,

A VAT reduction will benefit everyone but it is very general, a removal off VAT on housing building / DIY related products would make more sense.

Peter Rogers, Rushden, UK

Most essentials are not subject to VAT. So its probably demand for imports that will be encouraged.

WE need import substitution,eg grants for home generated power, Severn barrage windmills etc.

And we need jobs - so Employers Nat Ins. cuts/abolition.

Vat cuts, Mr Darling are no good.

N Reed, Truro, UK

Give us all vouchers to buy on Debehanms/Selfridges/Harrods. Job done.

RG, London, UK

so i only now have to pay £115.00
instead of £117.50
right, i think i'll buy 2, (NOT.)

tony castle, rennes, france

One of the most crippling, and outrageously unfair taxes, the local tax levied on householders, it is absolutely scandalous and should be abolished!

Clive Burghard, Lancing, ENGLAND

A cut in VAT may well help stimulate spending. But if deflation is a significant upcoming risk then reducing VAT will just make that risk even higher.

Targetted cuts in income taxes would have been better.

Rob Shaw, Leeds, UK

Postponement of rises in tax and scrapping of plans to increase tax can hardly be described as "tax cuts". Come on, Jonathan Oliver & David Smith - stop swallowing the government's spin.

Neil, Galloway, Scotland

Sorry Mr. Brown but you are dreaming if you think, as with interest rate cuts, retailers and utilities are going to pass on any proposed VAT reduction to consumers. They'll just pocket the lot and laugh all the way into the nexty fiscal year.

Chris, Nottingham,

Can't see how a £5 tax rebate - VAT or otherwise is going to persuade me to part with my cash in a whoppee shopping spree.

Charles Dowie, Epworth, UK

I've read that this VAT reduction will only save the average family £10 per week.

Do they really think that will have a major impact?

I think not.

Steve, Birmingham,