Clegg accuses PM of ‘wasting’ £12.5bn on VAT cut

By staff

Liberal Democrat leader Nick Clegg has labelled the 2.5 per cent cut in VAT as a “waste of money”.

Speaking on BBC Radio 4’s Today programme, Mr Clegg joined Conservative leader David Cameron in opposing the move.

Previously, Mr Cameron called the reduction in the tax paid by consumers on purchased goods an “expensive failure” as retail stores had reported a decrease in footfall of 3.1 per cent over December.

The leader of the Liberal Democrats said the cut in the rate of VAT to 15 per cent, which cost taxpayers £12.5 billion, should have been used to fund a green investment programme instead.

He told the BBC: “We would not waste £12.5 billion on the VAT cut which the prime minister has delivered, which we don’t think makes much difference.

“We would use all of that money for a green investment programme, insulating every school and every hospital in this country, and installing smart meters in every home.

“That kind of radical action not only creates jobs but it’s good for the kind of green economy we need in the future.”

In his New Year’s message, the prime minister insisted that the move would result in every family saving £275 on their shopping bill over the course of the year.

He cited the VAT concession as proof that the government was taking measures to reduce the impact of the slowdown in economic growth.