We cannot unilaterally reduce VAT (without leaving EU).
VAT is a general consumption tax, not a "luxury" tax.
If you want a luxury tax, then the party for you is UKIP, for whom this has been a policy for some time.
VAT is a complex issue, not least because, although there are some rates which are historic anomalies and because some countries exercise their rate to charge a higher rate than the EU basic (eg Denmark and extra tax on disposable items), you cannot lower a rate without EU unanimity.
That is hard to achieve, and thcurrent government may feel it has enough to on its plate in EU negotiations without adding this one.