In the UK; VAT will drop from 17.5% to 15% from Monday. The cut in VAT is one of Chancellor Alistair Darling’s tactics to encourage UK consumers to start spending again.

I think it’s a joke, and that the UK government have given too little away to make any real difference. Why so little? Because the UK Government, just like UK businesses; are greedy, and they don’t want to impact a high-income source too much.

Had they dropped it to 10%, or even 12 1/2%, that would have made a difference; but the proposed miniscule reduction will have negligible if any effect.

(Don’t forget; we’ll be paying for this eventually with a 20% VAT rate: I give this particular prediction a 4/5 chance of becoming a reality within the next 5 years.

The next government; if it’s Labour, will realise that there just isn’t enough revenue from GDP, despite a partial recovery, to balance the books against the massive debt built up when today’s Labour government threw money at the recession in the hope that it would go away before the available coffers ran out. (It won’t, but the excessive spending will help to cushion the depression.) Up will go Income Tax in the higher rates band for people earning £150,000+, and National Insurance Contributions, by up to 2%: But the prominent rise will be in VAT; which will then be raised from the reset figure of 17.5% to 20%. That will leave some people up to 5.5% worse off in order to pay for the current governments current plans, in addition to an increased burden on an already well-overstretched NHS.

A Conservative government would also increase VAT to 20%, if it’s not already at 20% when they are elected, and make cuts in public services rather than increase taxes, although the National Insurance Contributions rise appears unavoidable at some point.

The first thing they’ll be considering is their own pockets, and then paying off the huge debt.)

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So let’s take a look at how the 2 1/2% reduction will affect you; the British computing/geek public:

Your "cutting-edge technology" computer from PC World (UK retail store.), with a dual-core processor, 2GB generic RAM, and a 500GB hard-drive (Hardly cutting-edge!) will drop by £12.50 from £499.99 to £487.49. The 5-year warranty that they nag you into buying will only be £341.25 compared to £350. At the end of the day, then, your "yesterday’s technology at today’s prices" cloned computer will cost you a total of £829.74 compared to £849.99. (Operating system included.)

If you were to buy an equivalent purpose-built computer from Kustom Komputa with a 1TB hard-drive and 2GB branded RAM, but with only the standard 1-year warranty other than for some components with a longer manufacturer’s warranty, you’d still be paying £487.49 compared to £499.99. (Operating system included.)

Yes, I suppose that was an advert for Kustom Komputa. Of course, if you’d rather; you could always build your own:

Your new 1TB hard-drive by itself will cost you about £1.60 less. 2GB DDR2 RAM will cost around 25p less. A new chassis-fan will cost less than 5p less…

Across the board, then, the savings are so small as to be academic. Even a £16,000 Porsche will retail at £15,600: That’s £400 the government won’t be getting its hands on; it’s only £1600 rather than £2000 the greedy parliament will have to add to their coffers, but I very much doubt in itself it’ll get anyone spending any more: People will just offset the miniscule saving against inflation so far this year.

Someone’s bound to say "PC World are the bees-knees: Without PC World there wouldn’t be computers. PC World are great value-for-money. Kustom Komputa must be utter crap if they only charge that much…" (Someone actually said that to me already in essence!) Each to their own. I won’t argue with an "expert". Please email me and I’ll happily sell you a Kustomised Computer with those specifications for over £800, just to make you happy.

Do you think 2.5% is enough to get the nation spending; or is it too little too late? Leave a comment below:

I couldn’t be arsed to hypelink this article as I normally do. Let it be an exercise in the reader learning to use Google.