Yesterday was the first official day a cut in VAT (TVA) came into effect.

Having criticised Gordon Brown not so long ago over his handling of the British economy, President Sarkozy decided to follow suit an implement his own temporary tax cut. Neoliberal Sarko is now nowhere to be found, but then again, it IS Sarkozy we are talking about, continuity was never a strong point.

Here a few ministers (looking pretty smug, it has to be said) gather around for their first coffee at a lower price, including the Mayor of Nice and Minister for Industry, Christian Estrosi (Boo, hiss!) sitting second from left.

The cut seems to be widely welcomed, and comes as a welcome relief to Nicois restaurants (and me in particular) who are quite keen to be able to lower their prices.

However, some establishments won’t be lowering their prices but instead will be using the tax relief to raise wages.

I haven’t seen any directing from the government on which approach is preferable, Brown was quite keen for businesses to pass on the cut to the consumer, though with unemployment as serious as it is in France, I won’t complain against wage rises.