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Tories plan to cut business taxes
Britain's opposition Conservatives went head to head with the Labour government on taxes on Tuesday, saying they would slash business levies to create jobs to try to ease the pain of a looming recession.
- Agencies
- Published: 00:01 November 12, 2008
London: Britain's opposition Conservatives went head to head with the Labour government on taxes on Tuesday, saying they would slash business levies to create jobs to try to ease the pain of a looming recession.
The Conservatives, ahead in opinion polls but struggling to convince voters about their ability to handle an economic downturn, said its tax cut plan would create 350,000 new jobs over the next year by giving £2.6 billion ($4.11 billion, Dh14.87 billion) in tax breaks to employers.
The announcement came in the wake of data that showed British retail sales fell by the largest amount in more than three years and house sales hit their lowest level in at least 30 years in October.
Prime Minister Gordon Brown said on Tuesday he was ready to provide a fiscal stimulus to help the economy recover and hinted that he was prepared to borrow to cut taxes.
"A fiscal stimulus means that you are prepared to add to borrowing in conditions where you have low national debt to enable the economy to move forward," he told news conference.
Conservative leader David Cameron said Brown could not simply borrow and spend its way out of a recession, and accused him of of "failing to fix the roof when the sun was shining" by not building a surplus during a period of prolonged growth.
"We go into recession in a year when borrowing is going to be over £60 million. Normally a big budget deficit is built up at the end of a recession, so clearly borrowing is going to be horrific," Cameron told a news conference.
"Irresponsible borrowing will mean more taxes on families and business in the years to come, putting a drag anchor on our recovery."
He said his plan would use money that would otherwise be spent on welfare payments to fund the tax cuts, worth £2,500 per head a year to employers who hire workers that have been unemployed for three months or more.
Brown agenda
Employers would have to prove they had not made any redundancies in the previous three months, or fire employees for three months after claiming the credit, to prevent abuse of the system.
Brown has hinted he may be about to unveil tax cuts in a pre-budget report due out later this month.
His handling of the economic crisis seems to be winning him back support after a disastrous first year in office.
Brown yestedray said Britain would consider sending more troops to Afghanistan in a change of strategy sought by Barack Obama, but other countries must help share the burden.
He made the comments when asked if Britain would comply with a request by US president-elect Obama for more troops as part of a switch of focus from Iraq to Afghanistan, where Britain has over 8,000 soldiers already.
"Of course we're ready to consider what's necessary, but it must be part of a burden-sharing exercise," he said, responding to a question at the monthly press conference in his Downing Street office.
Crisis lifts brown rating
British Prime Minister Gordon Brown's handling of the economic downturn provided another boost to his Labour Party's fortunes on Tuesday with an opinion poll putting him only six points behind the opposition Conservatives.
The Populus poll for The Times put Labour at 35 per cent, up five points from the previous month, while David Cameron's Conservatives were down four points at 41 per cent and the Liberal Democrats up one point at 16 per cent.
It also showed that 52 per cent of those polled felt Brown was best equipped to deal with an economy heading towards recession compared with 32 per cent for Cameron.
However, 42 per cent of respondents felt Cameron was still the best man to lead Britain after the next general election - which must be called by 2010 - with Brown on 35 per cent.
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