Number 10 is briefing that a summer VAT cut on theme parks and children's meals is on the cards. The Treasury is spinning hard: a £2 billion boost to domestic tourism. But the real story is the politics behind the policy.
This is a gift to coastal constituencies. Blackpool, Great Yarmouth, Clacton. Red wall seats where families spend their holidays queuing for rollercoasters. The PM wants to own the 'family fun' brief. It's a wedge against Labour's green agenda, which some backbenchers whisper is 'anti-car' and 'anti-pleasure'.
The mechanism is simple. Slash VAT on entry fees and kids' meals from 20% to 5%. The Treasury's quiet hope is that operators don't hoard the margin but pass it on. But the real game is about headlines. 'Sunak cuts cost of family day out' plays well in the Mail and the Sun.
Whisper it, but some in the Treasury are nervous. The OBR will score this as a permanent tax cut, and they haven't factored in the inflationary pressure. The Bank of England will raise an eyebrow. But the political imperative trumps fiscal orthodoxy. Elections are won on the price of a burger and a ride on the Big One.
Backbench rebels on the right are grumbling. 'Where's the supply-side revolution?' they mutter. But the 1922 Committee is quiet. They know which side their bread is buttered. The PM's ratings need a bounce. This is a sugar hit for the polls.
The real test will be July. If the queues are long and the receipts are up, expect a wider VAT cut on hospitality before the autumn statement. If it flops, the blame will fall on the operators, not Downing Street. That's how the game is played.
