Gordon Brown wants to
maintain the initiative
on the economy
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Gordon Brown has fuelled
talk of possible tax cuts by saying they could
help to support consumer spending.
In a speech in London, Mr Brown referred to
planned tax cuts in the US and Germany, saying
countries must "work together" to tackle the
downturn.
Earlier, the PM said he was looking "at
everything" that could help the economy and
would announce details within days.
David Cameron says the Tories will announce
"tax changes to encourage businesses to take on
workers".
Government action
The Lib Dems have already said they would
cut taxes for lower paid people and have
challenged the two main parties to "put their
money where their mouths are" when it comes to
tax pledges.
Mr Brown has said that any potential tax
changes are a matter for the pre-Budget report,
expected next week.
In his annual speech at the Lord Mayor's
Banquet, Mr Brown said that "people are looking
to governments for action" in helping them
through the troubled economic times.
He drew attention to planned fiscal stimulus
packages in Germany and the US as well as
China's move to pump $600bn in its economy, all
aimed at encouraging people to spend more.
"With Britain continuing to lead the debate,
economic recovery will work better if we all
work together," he said.
"The benefits of any individual country's
fiscal action will be all the greater if this
is part of a concerted and fairly distributed
international response to maintain global
demand."
The BBC's Nick Robinson said Mr Brown was
dropping hints that he would be prepared to
borrow more to fund tax cuts but that nothing
was certain until the details were
confirmed.
Asked about possible tax cuts earlier in the
day, Mr Brown said petrol duty had been frozen
and people were already getting £120 back in
their income tax - the government raised the
personal tax allowance following the 10p tax
row.
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TAX PROPOSALS
Labour: Raised
personal tax allowance
to benefit basic rate
taxpayers by £120 this
year after 10p tax row,
stamp duty threshold
raised, 2p fuel duty
rise postponed. Any
further cuts expected
to come in pre-Budget
report
Conservatives:
Abolish stamp duty for
first time buyers on
homes up to £250,000,
raise inheritance tax
threshold to £1m, cut
corporation tax from
28p to 25p, encourage
council tax freeze.
Expected to unveil more
tax cuts on Tuesday
Lib Dems: Have
already pledged to cut
spending by £20bn to
help fund tax cuts for
low and middle-income
families by cutting
basic rate from 20p to
16p. Would remove tax
loopholes for the rich
|
"What I'm determined to do is get all
countries around the world trying to get their
economies moving again," he told GMTV.
"And one way you can do that is by putting
more money into the economy by tax cuts or
public spending rises but that's something we
have got to look at in the next few weeks."
On Monday, David Cameron told journalists
they would have to "wait and see" what the
party's tax proposals were but said there were
some clear principles:
"We want to help and we will help and we
will put money back in people's pockets," he
said.
There have been reports the party may
propose a National Insurance payments holiday
for new workers, to encourage employers to take
on staff.
He also warned against permanently damaging
the public finances and criticised the
government for having an "enormous budget
deficit even before the recession began".
"This government is talking and behaving as
if there's no limit to what you can borrow," he
said - adding any new proposals had to make
clear where the money was coming from.
The prime minister's spokesman said that
increasing borrowing was now the accepted view
across the world and the government would have
to look at all the issues relating to tax and
spending.
Lib Dem leader Nick Clegg told the BBC other
parties were "clambering on the bandwagon" as
the Liberal Democrats had been advocating tax
cuts for low and middle income earners for
months.
'Rebalance' taxes
But he said: "We are the only party saying
that tax cuts have got to be big, they have got
to be permanent and they have got to be
fair."
He said it was time to "rebalance the tax
system to make it fairer" by removing
"loopholes" that benefit only the rich on
capital gains and tax relief on pension
contributions, as well as clamping down on tax
avoidance and introducing more green taxes.
Former Chancellor Ken Clarke said previous
efforts to boost economic demand had clearly
not worked and called for cuts in VAT to
encourage consumers back into the shops.
In Monday's speech, Mr Brown also argued
that world leaders have a major opportunity to
rebuild the international financial system.
Ahead of a meeting of leaders of the world's
20 major economies in the US at the weekend, Mr
Brown said that recent co-ordinated global
action during the credit crisis showed the
potential of a stronger multilateralism, with
US and Europe in the lead.
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Economic
recovery will work
better if we all
work together
