Looking at it in context - VAT takes in roughly £110billion, the NHS costs roughly 120billion and the NHS needs funding urgently. To indulge themselves in a gesture of VAT reduction of 2-3% would be really a gimmick whilst at the same time denying the NHS the badly needed funding. This is regardless of the theoretical effects of a VAT reduction. It failed in the past & didn't even out over the two periods - temporary reduction period & period following return to normal VAT rate.
There is also an anticipatory effect. For every 1% reduction consumption falls about 0.33% in the quarter immediately before the introduction of the reduction & increases by about 0.33% in the first quarter of the reduced VAT, & increases about 0.15% duing all the other quarters of the reduction. However it then falls considerably on the re-introduction of the higher VaT rate - about -0.5% in the first quarter & levels off at about -0.25% thereafter. This happened, not only in the Uk but also in France, Germany & Spain. You would expect an evening out effect but in fact there was an overall negative effect on consumption. This is why I say it would be a gimmick - unless, of course they drop all VAT to 0% as @jaywalker suggests
[& close down the NHS
Edited 1 time(s). Last edit was 2016:11:21:20:30:31 by Lordship 516.