Darling's VAT rate cut put a massive hole in the UK's public finances.
VAT revenues during the last three months of 2008 were 12.5 percent below the same period in 2007. That is a shortfall of about ₤2.8 billion a quarter, adding up to ₤11.3 billion a year.
The government is about to run a deficit of 8.5 percent a year. This VAT cut added almost 1 percent of GDP to that deficit. As policy mistakes go, Darling's cut is proving to be very expensive.