HIGH street chains are failing to pass on to customers Gordon Brown’s Vat cut, a Sunday Times investigation has found.

A dozen big retailers, including Gap, House of Fraser and Selfridges, are selling stock at the same prices now as before the tax dropped from 17.5% to 15%.

Some companies have never implemented the cut, while other stores have quietly pushed prices back up again.

Ministers were banking on the £12.5 billion tax giveaway to stimulate the economy by getting shoppers to spend more. Announcing the Vat cut last year, Alistair Darling, the chancellor, said it would “help everyone and deliver a much-needed injection into the economy”.

Only last week the prime minister suggested that other countries hit by the recession should follow Britain’s lead by cutting Vat.

Last night George Osborne, the shadow chancellor, said: “This research confirms what most people already knew – Gordon Brown’s policies to deal with the recession are failing.

All he has achieved is a doubling of our national debt that our children will be paying off for a generation.”

Gap, which owns 148 stores in the UK, initially introduced the 15% Vat rate on December 1, the date on which the policy took effect, and automatically reduced prices at the till.

Last week, the firm admitted that it had gone back to its old prices in January, but it pledged immediately to reinstate the 2.5% discount.

Some retailers did not implement the Vat cut at all. Maplin Electronics, which has 153 UK Continued on page 2 Continued from page 1 stores, said the cut would have caused difficulties across its range of 14,000 products. A spokesman added that it had chosen instead to offer sales promotions on selected items.

Inquiries at five branches of Snappy Snaps, the photographic chain, also revealed a failure to pass on the Vat cut. Tim MacAndrews, a company director, claimed that its franchise structure meant that individual stores could only be “advised” to reduce Vat.

At Coffee Republic, which runs almost 200 cafes nationwide, the price of food and cold drinks has remained unchanged because of a “system issue”.

“We just simply had the practical issue of getting the prices changed,” said James Muirhead, the finance director.

At other stores, including the clothing outlets Oasis and Ted Baker, it emerged that Vat reductions were not being offered on sale items because of a reluctance to “double-discount” products.

In Selfridges, Gant and the Caffè Nero chain of coffee shops, prices have reverted to preDecember levels, with the companies attributing this to rising costs – even though inflation has fallen.

A pair of Adidas Chile 62 trainers bought at the Offspring concession in Selfridges on December 1 cost £63.60 – the marked shelf price of £64.99 less a £1.39 Vat reduction at the till. Last week the same trainers were on sale for £64.99 with no reduction being offered at the till. At Debenhams in Oxford Street the shelf price for a range of products appeared not to have changed since before December. Asked for an explanation about these items, the company refused to comment. It said: “All ticketed prices at Debenhams reflect the correct Vat rate.”

House of Fraser said: “Prices have been realigned for some . . . items, but it is unrealistic with such a large number of lines to do this for every single item.” When a reporter paid for a £25 teapot at its flagship London store last week he was initially charged the full price.

It was only after he asked about a Vat reduction that he was offered the item at the 15% tax rate, shaving 54p off its cost.

“Customers are unhappy because they are not getting the discount and shops are unhappy because they’ve had to go through all the bureaucratic hassle of changing their pricing for such a small reduction,” said Martin Lewis, founder of the Moneysavingexpert website.

Last week a survey by the British Chambers of Commerce revealed that more than nine out of 10 companies believe the government’s Vat cut has not helped their business.

A Treasury spokesman said: “The government urges retailers to pass on the cut to customers. Recent figures highlighted the Vat reduction as the largest contributor to the 1% fall in inflation during December, pointing to significant pass-through by retailers to consumers.”