Prime Minister points to tax cuts

10 November 2008

The Prime Minister, Gordon Brown has suggested that tax cuts may be used to help families and small businesses survive the economic downturn.

Interviewed on GMTV, Mr Brown said: “What I am determined to do is to get all countries around 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.

“That’s something that we’ve got to look at in the next few weeks.”

On the precise nature of any reductions in tax, the Prime Minister said that the details would have to wait until the pre-Budget Report.

Pressed on the question of a possible cut in VAT, Mr Brown said: “We’re looking at everything we can to see how we can help people and we will make announcements very soon about what we are going to do but I don’t want to say today we can do something that we can’t. We’re just trying our best to get through these difficult times.”

With rumours that the Treasury is compiling a package of tax cuts, experts have predicted that the measures would need to introduce a reduction in the region of £15 billion to have any effect.

Possible moves could see income tax lowered by 1p, the scrapping of stamp duty and a reduction in fuel duty.

As the government is not considering a significant reining-in of public spending, any tax cuts would need to be funded by additional borrowing.