VAT receipts collapse

The VAT cut might not have kept us shopping, but it did a number on public finances. December VAT collection was down a billion quid compared to the previous Christmas.

We can't blame it all on Darling's 2.5 percent reduction. The actual fall in receipts was closer to 20 percent. Nevertheless, we can conclude that the tax cut did nothing to halt the calamitous decline of the UK economy.

It would have been better if Darling had done nothing. At least, he would have received a little more cash to cover the losses from the financial sector.