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Talking tax cuts

Nick Robinson | 10:32 UK time, Monday, 10 November 2008

So, everyone appears to agree. The recession's going to be much worse than originally feared. Borrowing's high and going to get much higher. There is, therefore, no money to spend. So, now's the time to spend money on cutting taxes making sure that there's even less money in the exchequer.

Hold on a second. How can this possibly be?

The answer is that politicians and economists are all asking themselves the same big question - what if big interest rate cuts don't get the economy moving again? What, in other words, if the central banks prove to be impotent in the face of the looming crisis? Then, the argument goes, it would fall to governments to act. In the jargon, if a monetary stimulus fails they will have to try a fiscal stimulus.

Now, if you're looking to stimulate a failing economy you're not talking about the sort of figures that are normally bandied about on Budget Day - the odd couple of billion here or there. Economists talk, instead, of spending one or two per cent of national income. Now, one per cent of British GDP is about £15bn. That's where the talk of tax cuts on that scale has come from but that's all it is, so far at least. Talk.

It is, however, talk that Gordon Brown's fuelling. This morning on GMTV he said:

"What I am determined to do is to get all countries round the world trying to get their economies moving again and one way you can do that is by putting more money into the economy by tax cuts or by public spending rises. But that's something that we've got to look at in the next few weeks."

As I've written before, it is still far from clear whether he is simply trying to put a better gloss on the dreadful borrowing figures which the chancellor will have to unveil soon or whether he's seriously contemplating borrowing much more than he's forced to in order to stimulate the economy. Bear in mind that if ministers did nothing in the forthcoming Pre-Budget Report taxes would actually rise - the £2.7bn rise in tax allowances to end the 10p tax fiasco was funded for one year only and the controversial car tax (VED) reforms are looming.

Meantime, the Tories are on the brink of unveiling a tax cut which, they say, will help keep people in work. This is the same party that was only recently saying that "the cupboard is bare" and which boasted that they wouldn't promise tax cuts they couldn't afford. In the FT today, the shadow chancellor insists that they've not shifted their position arguing that "Spending our way out of recession will not work. Targeted tax cuts would help but they must be properly funded". Until we see the colour of their money it's hard to assess how different their ideas really are.

The Lib Dems are the only ones who've consistently proposed major tax cuts for some time (though they're paid for by their tax increases) They propose to cut the basic rate of income tax from 20p to 16p with the £18bn cost being paid for, they claim, by closing tax loopholes for the rich and increases in green taxes. They, like the Tories, argue that tax cuts should not be paid for by extra borrowing.

So, there may be agreement on the need for tax cuts to help stimulate the economy but there is none on the type, the scale or how they should be funded.

Some countries have, of course, already unveiled stimulus packages. The Australian government, for example, recently pledged to spend 10bn Australian dollars - estimated to be just under 1% of their GDP. In stark contrast with Britain, however, they're had budget surpluses for the past decade.

Comments

Page 1 of 4

  • Comment number 1.

    Gordon Brown is a joke

    He has thrown us out of the boat and into the deep waters and then is slowly throwing us a lifeboat- and then claims to be our savour

    What a joke!

    How about calling a general election?

  • Comment number 2.

    Nick

    Tell you what, I'll just apply for as many credit cards as I can get and max the lot right up to the limit. I won't have to worry about my fuel bills or christmas presents this winter, or about paying it all back this month. If it's good enough for Gordon, its good enough for me.

  • Comment number 3.

    The need for tax cuts has been self-evident well before this crisis struck. The reality has been that taxation policy has made the poor even poorer whilst the rich have been allowed all sorts of privileges.

    Now that the better-off have put the economy onto the rocks I don't feel any of their privileges were justified and almost feel like demanding my money back.

    However, nothing is to be gained at this stage by being vindictive. What we do need to do is revise our entire attitude to public spending and taxpayer funding.

    Current public spending must be restructured so that it feeds directly into the economy. Dogma must be abandoned in favour of practical measures that support the generality. Measures designed to pleasure the bureaucracy, such as ID cards, need to be phased out.

    Additional taxpayer support for the economy in the form of the pump priming of technology is also needed. This need not be that expensive and could provide the new industries we now badly need. Changes to corporation tax to facilitate R&D and similar investment would not go amisss.

    In all of this it will be possible to balance the books over time. However, in the short term there will be deflation and we need to support the economy by generating demand. Classic Keynsian economics will help when we hit the bottom next year.

    I can see that there needs to be a major refocussing of public policy. This can only be done over time. We need to plan for the consequential slump.

    We need more industry and less government. We need more productivity and less pontificating. We need less taxation but more effective public spending. We need less privilege and more commitment to the common good. This can be done but it will need a National Government as how else can a common sense of purpose be achieved?

  • Comment number 4.

    What a refreshing change it would be for Gordon to give back some of the money he's been taking from us via stealth taxes all these years.

    I'm not holding my breath though.

  • Comment number 5.

    Dear Nick
    House prices are to fall further over the next two years according to the Halifax Building Society, this adds to the Arguement that Housing should be removed from the GDP Calculations, as house prices in many cases are Ficticouis , and over inflated wich show in the crisis of economics.

  • Comment number 6.

    I'm in favour of the VED reform, though I seem to be in a minority. I replaced my 11 year old car late last year and the already announced reforms played a part in my choice; already my tax is lower than it was and with the reforms should get still lower. If the reforms don't go ahead and I end up paying more tax instead of less I will feel somewhat cheated.

  • Comment number 7.

    Brown? Tax cuts?? The Smoke and Mirrors shop should stock up very quickly.

  • Comment number 8.

    Right, now I knew what to do. Went off to the bank for a great big overdraft. Never mind that I'm unemployed, a senior citizen and without assets. The bank refused to oblige, traitors! Next step, using the 'plastic' I' bought up half of the new shopping mall and hired a truck to carry the junk home. Due in court soon, but not to worry. I have the perfect defence - I'm following my prime minister's advice, I'm very patriotic!!!!

  • Comment number 9.

    There are 3 obvious problems -

    Shortage of money in the system.

    Job losses.

    and critically - Fear is present in the consumer. This fear is there having been deliberately wound up in order to push the 'bail out' action through.

    Anything which addresses these problems has to be welcome.

    It is inevitable that there is a bill to be paid in the future, that is not the problem, the problem is stopping the slide. If the downward trend is not stopped then the downside is potentially very much worse. Tax breaks can be removed as quickly as they are put in, they are flexible.

    Housing may be becoming more affordable but the much publicised statements advising a 25% drop from peak will inhibit anybody, who can avoid it, buying a house until there are signs the bottom has been hit. It is a self-fulfilling prophecy and a somewhat bizarre thing to say when along side it is the other industry comment that no forecast on housing can be made. The housing sector is making a rod for its own back. It is an unsound strategy as the inertia will build up and the next thing consumers will be looking for more than a 25% drop. The overview can become habit forming in the same way looking for continual growth became habit forming with some.

  • Comment number 10.

    Why is the Government talking tax cuts ? Simple. It's hoping to get re-elected.

  • Comment number 11.

    Gordon Brown's bloated, inefficient public sector is the albatross hanging around our necks. Brown spent all the money we had on the public sector, then taxes and borrowed in order to spend some more, and that was when times were good. Now we're heading into a recession and his solution is to increase public sector spending once again. Personally, I would prefer a longer and deeper slump, if it causes necessary economic reforms and leads to a more stable economy coming out the back of it.

  • Comment number 12.

    So we need £15bn in savings?
    Easy, scrap the ID cards scheme and the NHS computer database.

    NHS database saving: £12bn

    ID cards scheme saving: £5.3bn

    That's £17.3bn saved for tax cuts.
    Can I have a job at the Treasury now?

  • Comment number 13.

    He can do what he wants, i think he is already resigned to the fact that his policies have been found out and he will always be associated with it.....

    The labour party would have to get rid of him as leader to stand any chance at a general election, and the public would need to see new faces at the top.........

    Yes we need tax cuts but they will need to be massive to offset the food and energy price rises in the last 24 months.....and the already planned massive hike in car duty.

    Then when people have paid them bills and only then will they think of "stimulating" the economy.

    This country is bankrupt and will be for many many years to come and seeing GB's face will only serve to remind people who the architect of it all was....

  • Comment number 14.

    The proposed tax cuts are a vote catcher not a panacea to revive our economic fortunes. The money that is intended to go straight into the pockets of the poor will not feed back into the economy in the way intended because it will be used to pay off debts and save for Christmas and annual holidays needed to mitigate against wretched conditions at home during the rest of the year. Granted it will lower the personal debt of these poor unfortunates during these terrible times of financial hardship but it will do little for the 'real economy'. If the 'real economy' can be stimulated all of us will gain. This is not the way to achieve that aim in my opinion.

  • Comment number 15.

    I know, why not apply an extra tax on all those who voted labour and cuts for those that didn't.
    Thus aligning obligations with responsibilities.
    Labour voters have got what they asked for.
    Watch out for the financial crisis coming our way.

  • Comment number 16.

    Tax cuts in the form of:
    Scrapping ID cards - at least £4 billion
    Putting trident on hold for 5 years - another £4 billion
    Tell Europe we will not be paying quite so much to them this year - say £2 billion less!
    Cutting fuel duty by 5p - dunno how much this would be but it would bring prices down across the economy.
    Cutting VAT by 2p - it would be a cut of a few billion and mean business has more money.

    Now these would cover the cost of the tax cuts. When do I get to be Chancellor?


    It's all well and good talking about hard pressed families, but it is business that needs to get us out of this mess. And currently business is really hurting. The housing market does not need further stimulus and it should be allowed to plummet otherwise we will be seeing a major correction over many years.

  • Comment number 17.

    How about getting rid of the following:

    1) Abolish Stamp duty
    2) Reduce VAT
    3) Remove Congestion Charge
    4) Reduce income tax
    5) Get rid of liscence fee
    6) Make council tax fairer

    These are a few adjustments that will make people better off, make us spend more and help boost the economy

    Taxes always go up- how about they come down for once

  • Comment number 18.

    there is a simple reason behind the talk of taxation cuts and it is to win the public over in readiness for a general election.
    we all know this countries borrowing has maxed out and every one will have to help repay the loans by taxes etc, so why the talk of cuts.

    this government loves stealth taxes and giving people a reduction in income tax will loose the government nothing becouse they will raise duty on tobacco,alcohol,fuel and then add tax onto power and paper a 1 percent raise in vat will offset any losses on tax cuts and the government will make a profit in the process.

    do those in westminster realy think the public is that gullable sadly they do and to be honest if they can fool there mindless supporters then there battle is won.

    we nolonger have a government for the people in this country recent events have shown that we have a neu labour government for the upwardly mobile.

    they harp on about a classles society but they themselves are creating a social class system that rivals communist russia under stalin.

    old labour was a party formed for the working people of this country with there unions to help and improove the lives of the common folk, this neu labour party is out for themselves first and seem to have this "im allright jack" idealism that will and has been killing this country to the point we are dependent upon europe to survive.

    its time the people of this country did something.

    in the words of V " the people should not fear the government, the government should fear the people."

    ok people its time to make the government fear us.

  • Comment number 19.

    The problem with the measures that have been taken and the ones mooted, is that time is needed for the effects to kick in. A consumer spending increase may occur in the short term, but the more elusive quarry confidence is a different beast altogether.

    To illustrate:
    About 20 years ago at a CBI Conference, a businessman spoke about the success of his jewelry chain that hehad painstakingly built up over the previous two decades through hard graft and convincing the consumer that they had confidence in product. This was shattered in a stunning 15 seconds when he revealed that essentially the jewelry he sold was c**p! Within months the chain was finished.

    The analogy is apt as you can talk the economy down in minutes, but talking it up will always take years. The problem for GB is he does have years, only spin. What is more worrying is that the one so called good bank has just announced a $4.3 bn write down and that they think further write downs are forthcoming in the financial sector. The article did not indicate if these were UK specific or not.

  • Comment number 20.

    Nick,


    This is getting surreal...........


    1. We have to borrow more because Brown ramped up our debt during the good times. That is why the 'cupboard is bare'.

    2. Conservatives and Lib Dems have been talking about tax cuts for a long time.

    3. 'Spending' - is not the ONLY way out of a recession. A balance of initiatives is needed.



    So your post gives the Lib Dems a pat on the back, kicks the Conservatives in the balls and gives no comment on the architect of our financial doom, Gordon Brown?


    Really??!!!


  • Comment number 21.

    Some years back GB promised to make huge savings by getting rid of 100000 public sector workers - what ever happened to that, and did anyone hold him to account? What/where were the savings?

    Why is there not a huge media fuss made of the "£120 per person refund" that is only going to be a one-off? Surely this warrants some major public attention by the Opposition - or are they just as insecure as the Government?!

  • Comment number 22.

    does this government understand anything other than spend spend spend and that with money they have not got.
    If they want to stimulate the economy why not give everyone access to the same tax free benefots as MP's - if we could all furnish our houses from the John Lewis list tax free on expenses I am sure there would be an immediate retail boost.

    For that matter why should our leaders, local and national, be insulated from the pressure faced by the rest. Salaries should be based upon a reasonable average and pensions influenced by the performance of the pensions achieved by the rest of the population.
    In the current downturn it appears that less of us will be forced to shoulder a heavier burden of financing our leaders.
    That would not be so bad if they had demonstrated competence and value for money. But as it is the similarities with a training scheme for lower management are hard to avoid.

  • Comment number 23.

    To coin a phase I smell Fear in the New Labour Camp.

    Oh sorry! Didn't see that cow field, it must be something else I smell.

  • Comment number 24.

    "The Australian government, for example, recently pledged to spend 10bn Australian dollars - estimated to be just under 1% of their GDP. In stark contrast with Britain, however, they're had budget surpluses for the past decade." - that says it all about Brown's mismanagement of the UK economy.

    But in answer to your main question "how can this possibly be?" the answer is simple - there is a general election looming and the main parties are falling over themselves to bribe the electorate to get their votes. The real pain is being saved up for after the election when spending cuts and tax rises will be absolutely necessary, whichever party wins the election.

  • Comment number 25.

    My general view remains that interest rates and tax cuts are not a solution in themselves, and that both R&D and employment security must be made more robust. The days of making easy pickings from finance are over, and looking at creating an economy that focuses more on real products and quality of life is key. This may require a bit of imagination and belt tightening but I prefer that to the alternatives on offer.

    I've just bought myself a digital camera. I've wanted one for years but only just got around to it. The immediate benefits is it gives me a practical hobby that gets me off my ass. I can turn all the theory I've read about and vague notions into something demonstrable. I have something to do with my spare time, it doesn't cost anything, and there's a whole slew of knock-on benefits. It may not grow GDP but that's a crock anyhow.

    Bling and tax cuts are not important in themselves. The key issue was an remains how people approach things. I'm not looking at being a David Bailey or winning awards. My focus is on taking what I have and the opportunities in my city to develop technique and screw the best picture I can out of what's available. The means I have to stop daydreaming and yapping, and haul ass. The same is true for PLC's and the man in the street.

    You do what you are, etcetera.

  • Comment number 26.

    Brown needs to cut tax as it is generally so high that people are being strangled by it.
    The Labour party can cut tax to zero pence in the pound and I would still rather poke my own eyes out than vote for them at the next election. I have never hated a party like this before, there are so many front benchers I would love to meet in a dark alley!

  • Comment number 27.

    Tax cuts won't work. The marginal change in take home pay will quickly be absorbed in day to day spending. It won't stimulate the economy but - since most people live beyond their means - just makes a marginal difference to family debt.

    The US Republicans favour tax rebates, where households receive a cheque based on a retrospective tax cut. This also doesn't work as sensible people use it to pay down debt (i.e. no new money in the economy) and others spend it on consumer goods which sees most of the money heading towards asia.

    To stimulate the economy it is best for the government to spend the money on capital infrastructure projects. That way the money stays in the country, the country gains an asset, and there is invariably a large private investment that will follow.

    This is the time to initiate a new high speed rail network (which will stimulate the economy over 20 years) and for a more immediate effect we still need to build the 200,000 houses that we needed before the credit crunch. These actions will recreate the boom that accompanied the expansion of the railways in the 19th century.

    If we use the money wisely now we can have a scandinavian quality of life and a solid economy for when the global economy picks up.

  • Comment number 28.

    this talk of scrapping things
    you never mention scrapping MP's pay rises and there perks,

    let alone paying for a customs department that has been made redundent thanks to european rulings,

    or pulling our armed forces out of conflicts that are costing money and lives, no

    but hit things that already have cost enough to start.

    if this government wishes to allow peoples from overseas live here make them pay for the privilage.

    tax sports that seem to have money to waste.

    there are so many ways this government could raise money and still reduce income tax but are they fair???

    the majority voted these people into power and have to accept their choices its too late to start crying now, just sit back and accept your punishment like good little voters.

  • Comment number 29.

    Will Gordon Brown and David Cameron be making any statements regarding the X Factor or Strictly Come Dancing? I've come to expect them to pass banal comments on inane matters and ignore them when they attempt to comment on anything else!

  • Comment number 30.

    Gordon Brown has banged on for the past few weeks about the current economic crisis being caused by irresponsible lending i.e banks lending to people who have no hope of paying it back. He has then gone on to say there must be greater control/regulation over lending etc etc. So what he has just done? - cut interest rates to stimulate the housing market. Therefore people will be taking new mortgages out on properties which are forecast to lose their value for at least 1/2 years to come. They will therefore straightaway be in negative equity and will not be able to pay their debts if they lose their jobs etc. Isn`t this how all our troubles started in the first place and GB now wants to encourage more of the same by borrowing to give away by way of tax cuts. This country is in debt up to its eyeballs. We get the same old Labour answer when the econony goes belly up as a result of their mismangement - borrow to spend and, "lets just keep our fingers crossed and hope for the best". Its never worked before so there is no chance of it working now. Despite denials from No10 I am convinced Gordon is going to go to the country probably in Feb 2009. Because if he doesn`t the consequences of him staying in power will be the annihilation of Labour at the Polls and the melt down in the British economy which will years to put right. If I were David Cameron, I would start preparing now and get rid of George Osborne and replace him with William Haig who has the ability to run rings round Alisitair Darling. Osborne will have to pay the price for his recent folly and Cameron will have to put country before his friendship with Osborne. Its called leadership.

  • Comment number 31.

    Wonder if the bbc will highlight how gordon brown squandered any chance of a 'budget surplus' in the past 10 years....

    brownomics 101
    overspend in the up turn
    overspend in the down turn


  • Comment number 32.

    The rub is in the last paragraph, "Australia. like most other westernised countries have run a surplus in the good times"

    The much vaunted fixing the roof while the sun shines.

    WHEN is Gordon Brown going to be held accountable for his economic mismanagement.

    Nick you should ask Gordon one question time and again until you receive a proper answer before moving on.

    PMQ's should be exactly the same. EVERY non Labour question should be the same until an answer is given.

    The first Question should be why were you so irresponsible with your economic management during the boom years?

    It should be put to Brown in every interveiw no matter what subject his spin miesters want to cover. and it should continue on and on and on and on and on until he actually answers

    never ask him any other question.
    Waterboard him if necessary

  • Comment number 33.

    As they would say in his homeland, that's Scotland by the way. Gordon Brown "would sell his Granny" if it would get him re-elected.





  • Comment number 34.

    This is madness. We in the UK have had fiscal stimulation for most of the last decade thats why we're in such debt. The last thing we need as a solution is even more debt.

  • Comment number 35.

    Brown is at it again, going for the sound bite now, and hoping that when the details come out everybody will have forgotten exactly what he said.

    Wanna bet that some of the tax cuts he's promissing will already have been announced, as a means of staving off the 10p tax fiasco?

    Also, he's busy proposing the whole world re-stimulate their economies at the same time and in the same way as he is proposing to inflate ours. What if they don't? What if all that happens is that he gives us more inflation, and we splurge the lot on foreign imports without those exporting countries doing anything?

    If he's going to follow this disastrous route, at least ensure that any benefits that accrue stay here, one way or another.

    Plus, naturally, it goes without saying that these are unfunded tax cuts, if in fact we actually get any, and will be inflationary, and will doubtless be clawed back sooner rather than later, by whatever means possible, and remove any last vestiges of a reputation the man attempted to build for himself and his policies of being prudent and acting in the national interest.

    He's supposed to be making the right long term decisions for the future of this country, or at least that's what he was saying six months ago.

  • Comment number 36.

    Tax cuts funded by borrowing as a desperate attempt to buy votes . . . . .

    We've been here before, y'know. At the end of the Wilson/Callaghan regime.

    Inflation took the sting out of the borrowing then, and I don't expect anything else this time around.

    Tough for those people with no debts and a fixed income . . . there were a few in my family last time. Somehow, I don't think there are enough of them to decide an election.

  • Comment number 37.

    #25 CEH

    Lots of people are doing what they are.....and still losing their jobs. What now Charles?

  • Comment number 38.

    About 20 years ago at a CBI Conference, a businessman spoke about the success of his jewelry chain that hehad painstakingly built up over the previous two decades through hard graft and convincing the consumer that they had confidence in product. This was shattered in a stunning 15 seconds when he revealed that essentially the jewelry he sold was c**p! Within months the chain was finished.

    The analogy is apt as you can talk the economy down in minutes, but talking it up will always take years. The problem for GB is he does have years, only spin. What is more worrying is that the one so called good bank has just announced a $4.3 bn write down and that they think further write downs are forthcoming in the financial sector. The article did not indicate if these were UK specific or not.

    ...

    To stimulate the economy it is best for the government to spend the money on capital infrastructure projects. That way the money stays in the country, the country gains an asset, and there is invariably a large private investment that will follow.

    This is the time to initiate a new high speed rail network (which will stimulate the economy over 20 years) and for a more immediate effect we still need to build the 200,000 houses that we needed before the credit crunch. These actions will recreate the boom that accompanied the expansion of the railways in the 19th century.

    If we use the money wisely now we can have a scandinavian quality of life and a solid economy for when the global economy picks up.


    Those are both good comments and help illustrate where, I think, the focus should be. Mere interest rates and tax cuts won't do a thing for that. Indeed, they can just make things worse as people absorb the benefit and give nothing back in an ever decreasing contraction of capital. This is why how we look at things and what we do is important.

    I'm still of the view this recession is just a blip, and if business and government can come up with a more can-do and relaxed approach the pay-off down the road is going to have people giggling at how silly they were. It may look bad now but that's only because we're in it. Better days are down the road and it's important to remember that.

    Calm down, relax, be happy. It gets no easier.
  • Comment number 39.

    "31.
    brownomics 101
    overspend in the up turn
    overspend in the down turn"

    You missed:

    - achieve dismal value for money with "investments"
    - add layer after layer of pointless bureaucracy, such as the endemic target culture
    - reward your client groups (public sector workers, welfare underclass) whilst taxing the wealth-creating private sector into hardship
    - move goalposts to make your policies look good (pfi off balance sheet, dumb down exams to make your education policy appear successful, have police reclassify crime to make it look as though we're all safer, etc)
    - spin, spin, spin

  • Comment number 40.

    In stark contrast with Britain, however, they've (Austrailia) had budget surpluses for the past decade. - wonder why we did not have a budget surplus in a period of sustained economic growth? That might have been prudent ?
    And make no mistake here - eventually we will have to pay back this borrowing - this is no 'magic bullet' and the only advantage to Labour is that they will be long gone and the next generation will have to pick up the tab.
    Brown was NOT a prudent chancellor and spent OUR money (not his - our!!) like a drunken sailor and has the bare faced cheek to ask us to think well of him as he tries to clear up the mess he helped create.
    And if wants an accounting perspective a fair value for him might be possible but a mark to market valuation - none


  • Comment number 41.

    Surely we don't want people spending madly again, and increasing their personal debt still further; and we don't want the banks pushing loans onto those who really can't afford them, in order to fund that spending. House prices need to settle back to a reasonable level, instead of ever escalating: inflation, we used to call it - perhaps it's a dirty word now.

    We seem, with these proposed measures, to be headed straight back to where we've just come from. Can't somebody suggest something sensible? Something calming, that won't have people rushing out to buy things they don't really need, just to get the economy moving? Something that will stop the fuel and energy companies holding us to ransom? - because that would lower prices and the cost of living at a stroke, freeing us up to buy frivolities like food, and school clothes, and similar fripperies . . . Why will the government not exert itself on our behalf in this area?

  • Comment number 42.

    High borrowiing and high spending has got the public finances and the economy into a unholy mess.

    Solution - high borrowing and spending.

    Therefore, the right man for the job of getting us out of the mess ? It has to be the man who borrowed and spent us into the mess. It is obvious, isn't it?

    "Those whom the Gods would destroy, first they make mad."

  • Comment number 43.

    Cutting VAT wouldn't prove anything. All cuts in VAT would be soaked up by supplier/producer price rises and Joe Public would gain not one jot.

  • Comment number 44.

    This looks like a scorched earth policy by Labour to try and ensure they are only out of power for 1 term.

    By the time these tax cuts come into effect (just before an election anybody?) Its not labour but the conservatives that will have to find the money, labour can then claim that while they cut taxes the conservatives have not.

    This has nothing to do with helping the country and everything to do with a cynical attempt to avoid another 18 years in the wilderness.

  • Comment number 45.

    #1. mr moe

    Wants Brown out and a general election

    Oh, and you think the other lot will:
    1. win
    and
    2. do any better?

    I want a National Government with all parties included to tackle this terrible financial and economic disaster.

    Things to do for the National Government:

    1. Scrap all Computing projects not yet finished (incl. ID cards, NHS Computing fro Health, various MOD, Foreign Office, Home Office etc. systems) should save at least 20 bn.

    2. Stimulate spending by giving money to the poor and the elderly (they will spend it which is what is needed)

    3. Cap house price multiples of income at 3.5 - short term pain but it will prevent interest rate falls going straight into house price inflation.

    4. Halve VAT for six/nine months.

    5. Join the Euro now so that our manufacturers/exporters have a level playing field when competing in our main market.

    6. Withdraw from Iraq and Afghanistan now - we cannot afford it.

    7. Pay for the scrapping of old and inefficient vehicles and ban (or punitively tax) from sale new vehicles if they are inefficient.

  • Comment number 46.

    Every time you think Gordon Brown cannot get any more transparently cynical he goes and surprises you.

    It's amazing isn't it. They win a traditionally safe Labour seat with a reduced majority but that's enough to send the ego ballooning out of control again.

    This is a classic Brown political move. Claim he has managed the economy so prudently that we can afford unfunded tax cuts on top of bringing some public spending forward. When the other parties argue that we need to find savings in other areas of government label them as NHS cutters or that they 'can't take the difficult decisions' (oh the irony!).

    This, I imagine, is being used as a trailor for a possible general election because as we all know the Glenrothes vote quite clearly signalled that the electorate has given resounding support for the great leader.

    I just hope this latest attempted bribe hasn't lured the Tories into promising far reaching tax cuts beacuse if they do then we've walked straight back into boom and bust fiscal policy. Just about keep the economy on par by slashing taxes then have to raise them all the way through the recovery. Brilliant.

  • Comment number 47.

    In stark contrast with Britain, however, they've (Austrailia) had budget surpluses for the past decade. - wonder why we did not have a budget surplus in a period of sustained economic growth? That might have been prudent ?


    The money doesn't mean a thing. The illusuary value just enables Australians to be a bit fatter while someone else is a bit thinner. On the other hand, borrowing more of this illusuary stuff focuses attention and takes pressure off other markets.

    One could argue the Australian position is worse than the British position as oil economies have found that a pot of gold retards economic development and attitudes. Again, I argue, this is an opportunity if people want to grasp that.

    People say they want change and wag fingers but the broken economic fundamentals won't fix themselves. That's an individual and collective issue, and challenges like this are exactly what's needed to propel change: if it ain't hurting it ain't working.
  • Comment number 48.

    addendum to #45

    Do Public works

    make the work:
    1. use lots of labour
    2. produce something of lasting value here

  • Comment number 49.

    From what I've read, GB is going to propose a new solution to his 10p tax fiasco (possibly not temporary this time), postponing the VED changes and a temporary cut in VAT. So, putting off planned unpopular tax rises (not the same as tax cuts) and forcing every business that pays VAT to recalculate their prices, and produce new labels, catalogues etc etc, only to have to do it again 6 months later.

    Brilliant (not)! Still at least the printing industry will profit.

    As for DC. Again from what I've read he is going to propose cuts in business rates, allowing businesses to postpone VAT payments, and a freeze on council tax. So, a tax cut, a bit of breathing space, and help for every home owner. This would also allow businesses to keep trading during the downturn and pay back any debts when we reach the other side. Almost like a National Business Overdraft (which by the way is a phrase I shall be trademarking!). Sounds sensible to me.

  • Comment number 50.

    Housing may be becoming more affordable but the much publicised statements advising a 25% drop from peak will inhibit anybody, who can avoid it, buying a house until there are signs the bottom has been hit.

    25% drop from peak? In your dreams. It'll be closer to 40%. And if there is any variation on that guestimate it will be to the down-side.

    Stop and think about those halcyon days of 2007. Average house price at six times the average wage. The average wage before tax that is. So more like ten times the average wage after tax.

    If you don't eat. Or drink. Or maintain the property. Or go on holiday. Or drive a car.

    Bear in mind too that these new houses come with a 10-year NHBC certificate. So you get to take out a 25-year mortgage on a house that's only guaranteed to last 10 years which, given the standard of construction and quality of materials used, is probably a fair estimate.

    Yeah. That makes rock solid sense.

    This whole pyramid of lunacy was only possible with insane levels of borrowing all-round. The time to nip this in the bud was 2001. Gordon should never have employed one million clip-board monitors on vast public-service pay and conditions. If he really needed to he should have made sure he was balancing the budget instead of borrowing 30bn a year just to meet the payroll of his expanded public service payroll.

    It was the effect of handing out one million cast-iron jobs and the salaries that go with them (introducing 30bn a year of borrowed money into the economy) combined with the failure to 'take' 30bn a year out of the economy in higher taxes that lead to the imbalance that gave rise to the property bubble. All that extra borrowed money looking for a 'home'. Quite literally as it turned out.

    Far from Gordon's doubling of the national debt being 'invested' in essential infrastructure it has simply evaporated into several million 4x4's, Plasma TV's and exotic foreign holidays. All long since devalued to practically zero. All we're left with is the debt.

    And now, in order to try and stave of utter ruination for another 18 months his big plan is to cut interest rates to (near) zero, cut taxes and quadruple the national debt. Much is made of the creed of Gordon Gecko. 'Greed is good...'.

    The creed of Gordon Brown appears to be 'Debt is good'. It was 'good' when the economy was going great guns (except it was never going great guns - it was all borrowed money squandered on ludicrously priced houses and the ephemera that we all thought we were entitled to as a result of our brilliantly timed property investment). And now, it seems, debt is good when the rug of consumer borrowing has been pulled by the banks and the economy is in the toilet.

    The banks really have been hung out to dry by Gordon Brown haven't they? For a full decade he's been lauding them for their business acumen and for driving the UK economy forward. He's praised them for the prosperity at large in the nation. Not a single word of caution about imprudent borrowing. The second it all goes pear-shaped he's in full-on hind-sight mode babbling on about an era of irresponsibility and pinning the failure of his government to manage the economy on the banks and the yanks.

    And as usual, lacking anybody with an enquiring brain, the BBC is four-square behind him. Yes. It was the irresponsible banks wot done it. And Cletus in Iowa with his NINJA mortgage. It's all his fault. Not the government. And their failed interest rate policy. Or their failed fiscal policy. Or their failed social engineering policy. Or their failed regulatory policy.

    If I were Fred Goodwin or Andy Hornby I'd be spitting. They must have been bought off or warned off (we'll nationalise you and trash everybodies shares) from speaking out. A decade of basking in the sunshine on the reflected prosperity of the UK banks and when they need help he's using them as political pawns.

    Why is RBS remaining independent when it needs capitalisation of 15bn but HBoS has to be subsumed by a bank that itself needs to borrow 5bn? Why do the Scottish bank's directors have to commit sepuku but Lloyds CEO, who himself has his hand out for 5bn quid, gets hailed as a prudent manager?

    Give all the banks to me. The bank of U9461192 doesn't need any bailouts. I'm the most prudent one. I should be CEO.

    What is going on? Who is separating the sheep from the goats here? To what end? Is it really as simple as trashing the Scottish banks to frighten the people of Glenrothes from the SNP?

    The job of the BoE and FSA was to help the banks out on the quiet when they hit funding issues. Their job is to maintain the integrity of the UK banking system. It isn't to hold them up as a scapegoat for the failure of government policy, trashing the long-term reputation of the UK banking industry.

    But Gordon Brown doesn't care. What's the long term reputation of the UK banking industry compared to his personal reputation eh? He's screwed up but somebody else must be held accountable. And publicly tarred and feathered.

    A job the UK media seem only too happy to help him with.

    Now they'll all suck their teeth and decide that, on balance, just printing money and deferring the paying back of debt is in everybodies best interests. No it isn't. It's in very few peoples very short term interest. Top of that list being Gordon Brown's short term interest.

    That strategy will only work for another year or two tops though before our entire economy implodes for good. Long enough for Brown to wash his hands of the nightmare of course but not exactly in anybody medium or long term interests.

    The fact is that we as a nation, government and individua,l have been living outside our means for the best part of a decade. It's been great. We've all had a blast. But now we have to grow up and assume the responsibility of paying it all back. It ain't okay to just go out, get another loan and hit the town again.

    It's the difference between having a lost weekend and going in to work on Monday to pay for it all and being an irredeemable alki with a strawberry nose and urine-soaked newspapers for blankets.

    Gordon Brown is just that binge-borrowing nut-case yelling at us at the train station to lend him some money for a cup of tea when we all know full-well he's just going to spend it on (economic) booze again.

    Don't let him. Take the bottle off him.

  • Comment number 51.

    An enormous fiscal stimulus, at no cost to the government, could be provided by extending national insurance to all earnings, introducing a 50% tax rate on all earnings beyond £100,000 pa and diverting the £10 billion generated every year into the paypackets of average earners, poor pensioners and those on benefits. Labour should have done this in 1997, but it is still not too late.

  • Comment number 52.

    The most effective boost to the economy is to increase the resources of those who spend. There's no point in capital gains or inheritance tax giveaways - that's for the rich, or at least the relatively affluent, and such money would largely be saved.

    The way forward quite simply is to confirm the new personal tax allowances for the future, and then to increase them significantly. Workers on modest incomes will be the biggest winners, although there is something in it for every taxpayer.

    Its redistributive - which is part of what Labour is supposed to be about, and it supports those with income - from earnings of investments.

    Temporary reductions in VAT would, apart from any EU issues, eventually have a cliff edge effect to create a new problem in the future.

  • Comment number 53.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 54.

    Time now to evalute and scythe away the useless quangos that infect this country.

    The colossal amount of cash Labour have wasted on stupid things that have no value and no return is the only thing the Tories have to highlight.
    I find it offensive that there's money available for some nonentity civic bureaucrat to have taxis wherever he pleases, but our brave boys and girls in the forces have to spend their own cash if they want decent kit.

    So tax cuts or no tax cuts; for me Labour is out on its butt whenever I can get the chance. I'm 26. I voted for Labour last time probably because my dad did and his dad before him, (and the alternative was Michael Howard). But I will never vote Labour ever again. Their mess will be inherited for generations to come.

    I *so* want the opposition to be good enough though. I am positively willing it.

  • Comment number 55.

    Prime Minister Gordon Brown is cementing his position as the world leader driving our way out of this crisis. In a keynote speech delivered tonight, he calls on President Elect Obama to grasp the opportunities instead of withdrawing into protectionism.

    Obama talks up the policy bling and presses flesh but his natural personality is deeply conservative and insular. Brown will not gain his respect or have influence if he kowtows, hence his strong man approach tempered with consensus.

    Some people will lament over the bare horizon. Others will procrastinate by fiddling with patching holes in the boat. Meanwhile, Prime Minister Gordon Brown is seizing the spirit of winning by focusing on getting the ship to port.

  • Comment number 56.

    Grawth

    I agree in principle with what you say but freezes and postponements in tax and council tax just tells me that it will all have to be paid eventually, and not written off.

    If people can't afford to pay it now, how could they pay it in, say six months?

    Not decrying your suggestion, just being objective.

  • Comment number 57.

    Once again, Brown has shown his true colours. Frightened by the ideas coming from the opposition parties, he has decided to adopt his usual tactic and steal the ideas whilst claiming claim credit for them. Maybe, if the polls show a Labour revival, he could call a snap election and regain power?

    Sadly for him, the public know who is responsible for screwing the British economy over the last 11 years, just as they know who will eventually have to pay the extra tax to settle the debts incurred by Brown's incredible appetite for borrowing.

    No matter how much he tries to spin the focus over to his miraculous handling of the Global Crisis (and how he alone will lead the World in Financial Reform) the sad truth is that it was Brown who refused to build reserves during the 'boom' times and has left the British Economy unable to weather the 'bust' times.

    So please, before you do any more damage Gordon, call a General Election. Then we can get rid of you and seek the true path to economic enlightenment. One that works and does not burden our children and their children with a debt-ridden economy.

  • Comment number 58.

    If this Government is so keen to help small business why is it still INCREASING the taxes on small companies?

    We have already seen an increase in corporation tax for SMEs from 19% to 21% and this goes up to 22% in April 2009.

    At the same time the tax on large companies is coming down from 30% to 28%. Obviously paid for by the increase in the small company rate.

    As always look to the small print with Gordon Brown because he says one thing but we pay for it in another way which he does not mention.

  • Comment number 59.

    So Charles thinks "money doesn't mean a thing" and it only has "illusory" value enabling Australians to be "a bit fatter" while others are "a bit thinner".

    Charles, can I suggest you take that argument round to the people who have lost / are losing their jobs, or have seen their mortgages skyrocket because they were allowed to borrow too much, or have seen their gas, electric and food bills rise repeatedly.

    I humbly suggest that if you try and tell them that "money doesn't mean a thing - it's only illusory", then they will probably introduce you to their imaginary fist, because one thing is for certain, the likes of Tesco Barclays and British Gas etc don't accept illusory things - only cold hard cash.

    Still, maybe they could pretend the street they're now sleeping on is a soft mattress, the cold doesn't really exist, and the rumbling in their stomach isn't really hunger, it's just a band of marching pixies practising for the carnival.

  • Comment number 60.

    Public Schools such as Eton and Harrow (Winston Churchill) are famed for producing pupils with strength of character. They are character building schools.

    Conversely there are some daft twits coming out of comprehensive (like, I mean, like, you know what I mean, like, whatever, innit).

    I know people of all ages who went to both and I have to say those who went to Public School have outstanding character and leadership qualities. Why do you think our public schools are world famous? Why do you think people from overseas send their children here to attend them?

    There is a kind of inbred snobbery in trying to knock those whose parents thought highly enough of their children to send them to top schools. Actually more parents could but don't because they prefer to spend their money on designer togs, mindless computer games, holidays in Lanzagrotty etc.

    ITS CALLED JEALOUSY.

    Chalk and cheese.

  • Comment number 61.

    @55

    He is more like Ahab persuing his Moby

  • Comment number 62.

    Following the success of John Sargeant on Strictly Come Dancing, perhaps Nick will be asked to take part in the next series.

    Maybe Peter Mandelson can also be put in charge of the music, just to make sure that Nick always dances to the new Labour tunes!

  • Comment number 63.

    62.

    ha ha Oh Mandy, you came and you gave without taking NOT

  • Comment number 64.

    People are worrying about job security at the moment - so are reluctant to spend.

    To give people confidence, EMPLOYERS need to be encouraged to maintain staff levels. Employer tax cuts can be effective - 1. making it cheaper for employers to keep staff employed; 2. encouraging inward investment by foreign companies - improving the situation further.

    As much as I personally would welcome income tax cuts, these tend simply to improve the life of those in least difficulty - ie those still employed. So not a sensible place for a government to spend our money in a time of need.

  • Comment number 65.

    Shellingout,

    That's just it though - the freeze in council tax would not need to be repaid later, because it is funded by savings already discussed when it was announced by the Tories at their conference.

    Postponing businesses paying VAT should be (in my opinion) a bit like the student loan - you only pay it back when the economy is on the road to recovery. After all, if we insist on the tax being paid in full and on time, then all that happens is the businesses can't do it, because noone is spending at the moment, and so they go bust. If you allow them to wait until things pick up again then you can ensure the survival of most of the business, and therefore most of the jobs. You could even earn a bit of interest on the deferred payment and make a profit for the country.

    National Business Overdraft. You heard it here first!

  • Comment number 66.

    I'm sure plenty of economists would argue that it's OK for the government not to worry about having to borrow more money than they should right now and to pump money into the economy via either tax cuts or increased spending, as the danger of recession is far greater than borrowing too much. Maybe they're right.

    However, what bothers me about that is who are they going to borrow the money from? Didn't we get into this mess because no-one has any money to lend in the first place?

  • Comment number 67.

    Borrowing more money to fund tax-cuts?

    This is the final part of the jigsaw to confirm that Labour have completely and utterly lost the plot.

    Gordon is maxxed out, borrowing more through issuing gilts will:

    a) increase interest rates
    b) require MORE TAXES to pay for the interest.

    In the end, we'll all pay more through higher mortgage and credit payments.

    What is required are funded tax cuts.

    FUNDED TAX CUTS THROUGH CUTTING GOVERNMENT SPENDING.

    Here's how:

    Scrap ID Cards and Children's Database = £8bn saved (i.e. money not borrowed) immediately.

    Eliminate government waste and get rid of as many quangos as possible. They are thought to cost £60bn a year.

    Get rid of half of them now, and half of the remainder in the following year.

    That's £8bn saved, another £30bn in year 1 and another £8bn in year 2.

    So that's £8bn, £30bn and then £38bn NOT BORROWED for every year.

    Then use some of that to cut some taxes.

    The tax cuts should be:

    Cut employer's NI contributions.
    Cut corporation tax for small and large business.
    Keep the 10% rate permanately.
    Increase income tax thresholds.

    That would gut the unproductive wasting of our money and give it to the far more productive effort trying to keep people (taxpayers) in work.

    People in work paying tax not receiving benefit.

    Increasing winter-fuel payments, more tax credits are laudable but UK plc needs to protect jobs - no jobs, no tax revenue.

    Brown has it almost completely wrong.

  • Comment number 68.

    #62 U11714077

    I awoke to the terrible news on the BBC this morning that Heather Small has ben voted out of Strictly Come Dancing. I couldn't believe it......how could this have happened? My whole world revolves around this show and after hearing this awful news I lost my appetite completely and couldn't eat my Shreddies.

  • Comment number 69.

    Gordon has for abused the words 'spend' and 'invest' for so long, he no longer understands what they mean.

    For over a deacade he has spent too much and invested nothing; but claimed to be doing the precise opposite.

    Now is when the investments (that he never made) should be available to be cashed in, the cupboard is (as the tories say) indeed bare...

    The tories are also absolutely correct that you can't spend you way out... although that is what brown is now proposing.

    If there is to be more borrowing, then it has to be used for investment not spending.

    Investing in the people who are going to turn the recession around by generating wealth in the private sector. Not by spending it on non-productive public sector make-work appointments.

    It is not possible to generate wealth at the speed that Gordon spends it - that is a fundamental principal of socialism. However if he gets out of our way, then we can generate enough to keep the country moving.

  • Comment number 70.

    Perhaps Nick, you could ask just one probing question:

    Given that we managed to put aside the grand total of NIL nil during the best financial decades most of us can ever recall.
    Just when does Brown think we will we be able to pay back all this extra borrowing?

  • Comment number 71.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 72.

    Tax cuts will do nothing unless the public are sure its safe to spend. So all it will do is slow down the recession. If the gun has been fired and does not work then it will be deemed useless in the future.

    So confidence needs to return.

    We won't get that until there is a full and public understanding of what went wrong and clear measures to put that right. Otherwise we end up with Japanese style stagflation for a decade or so.

    Perhaps when Obama comes in there will be an international sea change in this regard as although I think the UK government were complicit in the problems Bush is not going to acknowledge sub-prime and de-regulation as issues on ideological grounds. Therefore Brown won't take the blame on his own.

    #59 Grawth

    I so agree but perhaps its a new measure that Gordon will propose before the next snap election - bills can now be payed with monopoly money!

  • Comment number 73.

    Others will procrastinate by fiddling with patching holes in the boat. Meanwhile, Prime Minister Gordon Brown is seizing the spirit of winning by focusing on getting the ship to port.

    That's probably where he's going wrong. You have to fix the ship before it sinks.

    There was a show on TV last night detailing Captain Cook getting hung up on the great barrier reef. He has to 'fiddle about patching holes' too. Otherwise the ship would have been sunk and all his men drowned.

    Then you can worry about getting to port.

    The difference was that Captain Cook was a great sailor whereas Gordon Brown is apparently a great Labour Historian. Thanks Gordon. If I want an opinion on Labour History I'll bear you in mind.

    You could be inadvertently right though. Prioritisation doesn't seem to be one of Gordon Brown's skills. So, for example, he seems more concerned with a photo op with Obama than a period of introspection wondering how he could have got it all so badly wrong and then asking some grown-ups to fix it for him like he did with the Standard Chartered chaps who engineered his bank bail-out.

    It was all me! Me! My idea! Me! Me! Me! Tell them BBC. Tell them.

    He really is like that Viz character in a sailor suit being indulged by his mum isn't he?

    More of the grown-ups is what we need. Less of vain, reality challenged Gordon Brown.

  • Comment number 74.

    In July there were rumours that Alistair Darling was going to reduce stamp duty on houses.

    Result - house sales collapsed as people waited to see how much they would save.

    No there are rumours that VAT is going to be reduced.

    Guess what's going to happen . . .

    How NOT to spin.

  • Comment number 75.

  • Comment number 76.

    Personally as the father of a three year old, the thing that would make me spend more, is more help with child care.

    Child care costs for me have risen from £28 a day to £41 a day in just under 2 years so for 4 days a week now costing around £8400 a year, close to three times my mortgage (especially now interest rates have dropped further).

    Apparently as my wife and I earn around £40k a year between us we are too wealthy to have any but minimal support from the government. The latest reduction in interest rates covers just over 1 day's child care a month - not exactly something to get me out and spending, especially as I work in manufacturing.

  • Comment number 77.

    71. megapoliticajunkie

    Totally wrong... no point what so ever.

    :-)




  • Comment number 78.

    69

    Here you have the essence of a coherent Conservative argument. The only problem is that the person it should be directed to is David Cameron for his own recent tax proposals are very different. His problem in turn is that he perceives the audience he should be addressing to be the same one that Gordon Brown is addressing. These two are marking each other very closely. Handling the crisis to one's political advanatage is the name of the game until the next election and you can special-plead all you like.

  • Comment number 79.

    Given that we managed to put aside the grand total of NIL nil during the best financial decades most of us can ever recall.

    I'm afraid you're being over-generous there to the congenitally over-borrowed one. If we'd put aside NIL in the 'best' decade then we'd have been in much better shape. We actually put aside minus 300bn. For 'investment'. Or to make the payroll and interest payments on our debt depending on how you want to look at it.

    In addition we took on an extra 500bn or so of pension liabilities and, by our cavalier approach to finance, set the tone for our banks and voters too...

  • Comment number 80.

    #55 Charles_E_Hardwidge wrote:

    "Prime Minister Gordon Brown is cementing his position as the world leader driving our way out of this crisis. In a keynote speech delivered tonight, he calls on President Elect Obama to grasp the opportunities instead of withdrawing into protectionism.
    .....
    Some people will lament over the bare horizon. Others will procrastinate by fiddling with patching holes in the boat. Meanwhile, Prime Minister Gordon Brown is seizing the spirit of winning by focusing on getting the ship to port."

    Come on Charles, get consistent.

    You constantly say that the British don't do leadership.

    Brown is British.

    Ergo, Brown's no leader.

    Nonsense, isn't it?

    I'm sure he's trying to get a bit of order into things. Just left it 11 years too late.

    With his track record, he will probably "get the ship" into the wrong port, with a tarpaulin wrapped around the huge hole in the hull, and claim "Victory". Forgetting that all the passengers and most of the crew were obliged to take to the life-rafts, while he "gallantly" pushed ahead.



  • Comment number 81.

    How about the government re-introducing MIRAS on all new house purchases. It would certainly help lift the housing industry and be assured of giving the economy a boost across many sectors, ie service industry - legals, estate agency, removers etc and carpet, furniture and appliance manufacture and supply and would guarrantee a stimulas to the economy. I don't see any other tax incentive giving any guarrantees of us spending more or of creating much needed jobs.

  • Comment number 82.

    Why is it that the most obvious way of saving money without any pain to us here is never mentioned

    LEAVE THE EU

    Thanks to TB we will be putting in nearly £20 billion in a couple of years, leaving net contributions of nearly £8 billion. We could then scrap heaps of regulations, plus remove from our national ministeries all the staff we employ purely to ensure we conform to EU rules. The idea that the rest of Europe we stop us trading is ludicrous, as we have a massive trade deficit with Europe. People in our nothern islands would stop having to import milk from the mainland because Eu regulations forbid them from being self sufficient, protect our fishing fleets from being scrapped at our expense, while we are paying subsidies to Spain to replace them.

  • Comment number 83.

    The interest rate cuts do diddlily squat when nobody can borrow.

    The only way to get to the other side, if at all, is to give direct cash to poorest to spend. It helps inflate the debt burden away.

    However anyone with a mortgage, especially a tracker should be aware that it wont be too long before interest rates go into double digits as inflation is 'stoked' by this Government.

  • Comment number 84.

    #81 juliap

    I was going to suggest MIRAS but I thought it might have been a Conservative idea, which would have been wide open to ridicule by the labour luvvies on here. It was that which helped us get our first home. It's a good idea.

  • Comment number 85.

    @75 thanks for something more to get my teeth into

    Last week, in a statement to The Sunday Times, Peter Power, Mandelson’s spokesman, confirmed that Mandelson had discussed timber tariffs with Deripaska but said they had never talked about aluminium tariffs. Oh thats alright then!

    He said Mandelson’s claim that he had “never” discussed EU matters with Deripaska related only to the time he was on Corfu.
    Oh thats OK as well then, so lets be clear though, by on Corfu you do mean "on the Island of" and not "on the yacht of The Russian just off the coast of"

    Peter Power graduated with Honours from Ally Campbell "Economic with the truth" Class in 2003

  • Comment number 86.

    Won't there be a problem with an income tax cut, given the situation with the 10% band problem.

    Unfortunately, I cannot remember what is happening with the 10% band - has it gone? If it has gone, then a tax cut would be to bring it back!

    Enlighten me please?

  • Comment number 87.

    Let's keep one fact uppermost in our minds as this mess goes from bad to worse. It's now widely acknowledged that the UK is the worst placed of virtually all the world's major economies to deal with perfect economic storm that lies ahead, tax cuts or not. This despite Labour's constant ranting (er, let's call that lying shall we?) about "The UK being well placed to weather the economic storm ...". On who's say so?

    Gordon Brown has steered us into this mess using a compass set in a naive understanding of economics and, moreover, a dismal understanding of what makes people tick. On both accounts, he's demonstrated unequivocally that he hasn't got a clue. So now we're about to pay the price for Gordon Brown's hallmark mix of arrogance, incompetence and a Machiavellian pursuit of power. All the worst traits of a politician.

    For his time as prime minister, Gordon Brown will soon be infamous for the catastrophic mess he's made of his, brief unelected stint in office. Why did he think he'd be good at it?

    Ah well, serves us right I suppose: we get what we (don't) vote for.

  • Comment number 88.

    #82 cobber 950

    Brilliant. I've always said that our contribution to the EU is too large. The country would save heaps of money and all those Euro MP's on huge salaries would have to find alternative employment. The boot would be on the other foot then.

  • Comment number 89.

    Anyone any idea why my post at 71 has been referred, I cant think of anything in the house rules that would have required this
    I have not had a post removed before.?

  • Comment number 90.

    this country really is in trouble now.

    last i heard, our biggest export was financial products!

    our manufacturing is mainly for foreign companies, meaning the country only benefits in terms of shop floor and middle management
    salaries and business rates. this is insignificant.

    we have scant natural resources and we now have a dependency on services from abroad to keep our national grid powered, so as a country we are paying to keep the lights on.

    the only thing that has improved recently in this country are the hospitals.

    our education system is now a laughing stock compared to practically all other english-speaking countries.

    tourism is massive for us as it means we get money from people who aren't being paid from our own treasury, but the prices are now astronomical and the quality of our service industry is still leagues behind many other nations.

    the liberal democrat policy is farcical - they cannot seriously believe the super rich will stay here if the tax system becomes unfavorable?! also, a few billion will be spent within a year.

    i don't believe this country will have a positive balance sheet for many years. apart from anything else, there are 1million civil servants. that must equate to at least £25billion a year in salaries alone!

    how can we pay off the national debt if UK.com is making a loss?!


    as a nation we need to go back to the drawing board and re-invent ourselves. we need a product to sell to the rest of the world.

    i think we should invest whatever it takes in becoming the world leader of renewable energies and fuels, so we can at least be self-sufficient medium term and have something to sell long term.

    another way to stimulate the economy, in stark contrast to mr. brown's plan would be to sack 10% of the civil servants - now that would create some innovation!

  • Comment number 91.

    Brown seems to believe his own recent hype that he's somehow the right man for the job. There simply is no rational case for tax cuts now. All it will do is make the recession (or even depression) longer and nastier. However the PM is just playing politics. It's quite clear that the employment report (due on wednesday morning) will be a complete horror story, and this is his motivation. I can't believe that any of the Treasury officials are advocating this madness.

    Our home grown Nero seems to be lighting new bonfires rather than playing his fiddle.

  • Comment number 92.

    # 89 megapoliticajunkie

    I wouldn't worry too much: it's been referred not rejected. I've had the same thing before, and if/when it's approved it'll appear - sometimes 36 - 48 hrs later. I think the mods like to check/substantiate references if you've made a reference to someone/where else that merits being verified.

  • Comment number 93.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 94.

    #15 offshorebanker

    FANTASTIC BEST IDEA EVER ON THIS SITE.

    LET THEM REAP WHAT THEY DOTH SOW.

  • Comment number 95.

    Here we go again with C.H.Hardwidge and his approval of the pathetic G.Brown.This just again proves to me that the real backers of new Labour are champagne socialist.

  • Comment number 96.

    You constantly say that the British don't do leadership.

    Brown is British.

    Ergo, Brown's no leader.

    Nonsense, isn't it?


    Gordon Brown's individual personality type and Britain's collective personality type have certain qualities. If you examined them you'd understand them and the differences, and have a better grasp of policies and outcomes, and the process of change.

    You'll note that I'm not explaining more or giving you much wiggle room. Simply, I've been down that road 1000 times and people don't listen. They have too much ego at stake online, and dealing with the arguing and negativity is a drag.
  • Comment number 97.

    Unbelievable.

    Hazel Blears has the nerve to criticise anti-government posters and how they disrupt government policy. Now we have Gordon Brown on GMTV flying kites about treasury policy.

    This govenment is criminally incompetent; the chancellor manages to trash the currency by blurting out that we are facing the worst crisis for a hundred years, then Gordon Brown repeats the trick on breakfast television and takes the gilt market with it.

    They put in place a regulatory structure for the banks that gave the nod to lending geting completely out of control; like no other credit cycle ever before.

    We are supposed to believe that 180% household debt to income is okay this time around because it's 'affordable' - it may well be affordable in interest payments but the debt is never getting paid down and now the underlying assets (house prioces) are in freefall.

    'Affordable' debt was the excuse all the way up as the banks lent bigger and bigger multiples of salary all on the nod of the tripartite strurcture and its architect in chief Gordon Brown. The only affoedable thing was the interest payment - the debt is still a ludicrously hgih never to be repaid multiple of income.

    What are they thinking of pouring more petrol on this blazing fire? This is an absurdly catastrophic and chaotic way to run a country; it's more Argentina than the UK.

    When is someone from thje BBC going to stop towing the party line and confront these people with the fact that all our children will be paying this debt off for the rest of their lives?

    This is reckless and incompetent government and irresponsible journalism.

    Call an election.

  • Comment number 98.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 99.

    You made the mistake of criticising Chuck.

    If he doesnt like what you write he reports you to the mods.


    If someone is going to libel me or be rude, patronising, or incite more flamebait the post gets referred every time, and 90% of those referrals are upheld by moderation. Stick to writing good content and playing nice, and there isn't a problem.

    Seriously, guys. Cut out the macho and insulting stuff. It's just annoying and drags this place down. It only takes a couple of clicks to bin it and creates more work for the moderators. And if a post has been deleted let it go. Banging on and on about it isn't going to change a thing.

    Got that? Good.
  • Comment number 100.

    If everyone agrees this is going to be a long, deep recession then why the continued obsession with a 'downturn'?
    The current interest rate cut won't be enough to get things going. People also need cash in their pockets with tax cuts and tax breaks but the question is how that would be funded.
    It is a pity however that a bidding war seems to be going on at the moment. Everyone is jumping on the bandwagon.
    I made the point over the need for a further interest rate cut and tax breaks a few days ago. And, as you point out, once again it is Vince Cable who seems to be talking the most sense.

    http://theorangepartyblog.blogspot.com/2008/11/3-isnt-enough-for-deep-recession.html

 

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