Back in 2008 the Institute of Fiscal Studies concluded that the 2.5% cut in VAT that year was an effective tax-cutting stimulus measure particularly for consumers. Now since the welcome rise in retail spending by 1.1% in April there has been a complete reversal of that fortune with retail spending dropping by 1.4% in May. In the light of the recent figures (yup we can flexible, unlike some) Shadow Chancellor, Ed Balls has called on for an emergency tax cut and another repeat of the one off tax on Bankers bonuses to raise £2bn of which most would go towards creating 25,000 affordable homes which is still a pressing problem after a decade of rising house prices.

Now this is quite important as much as I personally am a fan of the two Eds, we do need to create a very very broad economic narrative before the policy review is completed. And this is a good and welcome first step.

Max