I’m only ‘categorically wrong’ if you think I was responding to a ‘different question’. I suspect we don’t have any actual disagreement.
The question being effectively asked (i.e. within the context of the conversation) was who supposed to take the immediate benefit of the tax savings: businesses, or consumers? As I suggested, it is of course the consumers that should be taking the benefit of paying less in respect of ‘unit plus VAT’. This does not stop businesses from raising NET prices but they would have to be relying on extreme goodwill to do so.
You would of course be correct in saying that the purpose of the exercise is to benefit everyone by ‘saving the economy’. That is clearly the ultimate aim, which is not mutually exclusive from my previous statements. Likewise, it’s obvious that businesses will benefit without increasing NET prices by consumers paying less gross costs, therefore making products more affordable and increasing trade - I agree that businesses will benefit via that means ?
it is therefore very much intended that savings from a VAT cut are for the benefit of consumers.
But they are offsetting savings that absolutely 100% are intended for consumers, because it is consumers that are charged VAT.
You are of course correct in what you are saying regarding VAT, and also in that not passing on a cut in VAT effectively equates to a higher net price.
However, what I was pointing out was the implication in some of your wording that the current cut is purely intended to be passed on to the consumer, when it’s been made very clear that this is not necessarily the case. Businesses have been told the opposite, that they can either choose to pass on the saving in return for potentially increased sales, or increase net prices to pocket the difference.
So you’re right, no disagreement, just clarifying that businesses who choose not to pass it on are doing nothing wrong and are still acting reasonably within the spirit and purpose of the rate cut.
There is of course the ‘Eat out to help out’ scheme, which is how the government intend to encourage people to spend within the businesses that are most likely to choose not to pass on the rate cuts... Restaurants and pubs
Marry that scheme with improved margins due to the rate cut, and some pubs might just make it through this. On a side note, on the whole I think Sunak is doing very well.