First cut in the tax for 34 years leads Government's measures to stimulate spending. At a cost of £13bn, says Treasury, it could save the high streetVAT will be reduced from 17.5 per cent as early as this week as Gordon Brown and Alistair Darling gamble £18bn on a Christmas tax-cutting plan to rescue Britain from recession. In a pre-Budget report (PBR) tomorrow loaded with huge political significance for the Prime Minister and the Chancellor, VAT will be cut - for the first time in 34 years - within days, in time for the first big Christmas shopping weekend.The cut will be at least 2 per cent, possibly to 15 per cent, where it will remain for a "holiday" of one-and-a-half to two years, bringing some relief for millions of families as the economic downturn worsens.This would take £10 off the average Christmas present bill of £384 and bring welcome respite to the beleaguered high street, where stores have been forced to bring forward the season's sales to get people spending.
VAT will be reduced from 17.5 per cent as early as this week as Gordon Brown and Alistair Darling gamble £18bn on a Christmas tax-cutting plan to rescue Britain from recession.
In a pre-Budget report (PBR) tomorrow loaded with huge political significance for the Prime Minister and the Chancellor, VAT will be cut - for the first time in 34 years - within days, in time for the first big Christmas shopping weekend.
The cut will be at least 2 per cent, possibly to 15 per cent, where it will remain for a "holiday" of one-and-a-half to two years, bringing some relief for millions of families as the economic downturn worsens.
This would take £10 off the average Christmas present bill of £384 and bring welcome respite to the beleaguered high street, where stores have been forced to bring forward the season's sales to get people spending.
Gordon Brown today condemned the Conservatives as uncaring and irresponsible for opposing his £16 billion package to save jobs and homes. Chancellor Alistair Darling will deliver the Government's pre-budget financial statement in the Commons tomorrow, including a massive fiscal stimulus package intended to re-energise the economy. A temporary 2.5 per cent cut in the rate of VAT to 15 per cent, which will cost the taxpayer around £10bn, will form the centrepiece of the plans, it is understood. Further tax cuts targeted at families and the least-well-off are also expected Mr Brown's plan to borrow more heavily to pay for the stimulus package was heavily criticised by David Cameron today, as the Conservatives resurrected one of their most successful advertising campaigns of the past, to warn voters they face a "tax bombshell" to finance the debt.
Gordon Brown today condemned the Conservatives as uncaring and irresponsible for opposing his £16 billion package to save jobs and homes.
Chancellor Alistair Darling will deliver the Government's pre-budget financial statement in the Commons tomorrow, including a massive fiscal stimulus package intended to re-energise the economy.
A temporary 2.5 per cent cut in the rate of VAT to 15 per cent, which will cost the taxpayer around £10bn, will form the centrepiece of the plans, it is understood. Further tax cuts targeted at families and the least-well-off are also expected
Mr Brown's plan to borrow more heavily to pay for the stimulus package was heavily criticised by David Cameron today, as the Conservatives resurrected one of their most successful advertising campaigns of the past, to warn voters they face a "tax bombshell" to finance the debt.
Stores are offering discounts of 20% plus already.
If that doesn't tempt people in, how will another 2% make a difference?
And it won't help the really hard-pressed that much because food (with exceptions) isn't subject to VAT anyway.
If the govt wants to support the high street, might the money not have been better targeted if they'd decided to hand it to retailers as some form of business rates rebate?
But I guess that wouldn't have allowed for political posturing over which party cares more about "hard-working families".
Darling to raise taxes for wealthy Alistair Darling, chancellor, is to target the wealthy with a new top rate of tax to help pay down soaring government borrowing, as he prepares to unveil a £12.5bn VAT cut to encourage Britain to shop its way out of recession. Mr Darling will announce plans for a new 45p top tax rate to be set at about £150,000 a year, to be introduced after the next election. He accepts that a tight squeeze on public spending alone will not plug the hole in the government's finances. Although the new tax would only raise several billion pounds a year, it breaches a central "new Labour" tenet of not putting up income tax or penalising the wealthy. It also opens up potentially sharp dividing lines between Labour and the Tories at the next general election. David Cameron, Tory leader, now faces a difficult choice of whether or not to support the mooted tax rise.
Alistair Darling, chancellor, is to target the wealthy with a new top rate of tax to help pay down soaring government borrowing, as he prepares to unveil a £12.5bn VAT cut to encourage Britain to shop its way out of recession.
Mr Darling will announce plans for a new 45p top tax rate to be set at about £150,000 a year, to be introduced after the next election. He accepts that a tight squeeze on public spending alone will not plug the hole in the government's finances.
Although the new tax would only raise several billion pounds a year, it breaches a central "new Labour" tenet of not putting up income tax or penalising the wealthy. It also opens up potentially sharp dividing lines between Labour and the Tories at the next general election. David Cameron, Tory leader, now faces a difficult choice of whether or not to support the mooted tax rise.
Politicians live in another world really. keep to the Fen Causeway
At a time of weaker demand, it is likely to be fully passed on to consumers, so it is a boost to wage earners in the from of price reductions. In the long run, we're all dead. John Maynard Keynes
