Mr. Sebastian Barnes:

One thing about the VAT rate cut is that it is temporary. That is very important for the public finances. The Government was running a deficit of more than 9% of national income during the pandemic, mostly due to temporary measures. Now that those have unwound, the public finances are in much better shape. That shows one can have big temporary stimuli without driving the public finances massively off track though, of course, we accumulated that amount of debt, rather than permanent measures. That is why this distinction is also a little bit important with the cost-of-living measures. Maybe energy prices fall at some point and temporary measures to smooth over that increase may be the appropriate thing to do. With regard to the VAT cut for the hospitality sector, the council does not look at these kinds of specific measures. Economists are often quite sceptical about those measures - how much they actually deliver and how much they reduce prices by, as compared to boosting the cash flow of those firms. In some cases, as during the pandemic, cash flow was the issue, but we are now in a different situation. We know the economy has recovered quite strongly. However that is not something we have looked at in any detail.