Chancellor Rachel Reeves’s £1.8bn package to help families with the cost of living crunch over the summer is at risk of unravelling after economists warned it is unlikely to help consumers.
Food industry leaders have also warned against any attempt to cut tariffs on imported goods – such as biscuits, chocolate and dried fruit – amid fears it may harm British businesses.
The Chancellor last week unveiled her “Great British Summer Savings” scheme – a series of policies including a cut to VAT for family attractions and on children’s meals in cafes and restaurants over the long school holidays.
Under the plans, theme parks, zoos and museums, as well as kid’s meals in restaurants, will have their VAT cut from 20 per cent to 5 per cent from 25 June to 1 September in a bid to help ease the cost of family days out.
But HMRC guidance on the plans states that the Government merely “expects” businesses to pass on the cut to consumers – and Treasury officials have admitted they have no means to force firms to reflect the cut in lower prices.
