I've mentioned before that the UK could reduce the rate of VAT on some "labour intensive services" to 5% if it chose. The OECD thinks this would be a bad idea, since the most needy in society don't tend to eat in restaurants, go to the cinema or stay in hotels.

The OECD's solution is to do away with reduced rates, and spend the tax revenue on targeted benefits. Personally, I'd rather people had jobs not benefits, which I thought was the whole point of permitting a reduced rate of VAT on LABOUR INTENSIVE services...