Sacred Cows
From Market Matters April 2010
Whitehall whisperings suggest a sacred cow is in danger. Civil Servants are believed to be investigating whether VAT should be levied on groceries which, together with books newspapers and children’s clothes are currently exempt. A levy of between 3 and 5 percent is being (very) quietly discussed as one way to help HM Government finance a budget deficit and borrowings expected to hit £180 billion in 2010/11.
As the ‘big four’ supermarkets currently sell about 80% of the UK’s groceries, a food levy would be easy to administer on their estimated turnover of £120 billion p.a. to raise a welcome £5 billion or so towards paying for HMG’s bail-out of the banking system.
