Morning:
13°c
Darling plans new relief for poor after the 10p tax fiasco
Joe Murphy, Political Editor12.11.08
ALISTAIR Darling is preparing a package of tax cuts for poorer households without children in his mini-budget later this month.
The measures would be billed as full compensation for those who lost out from the abolition of the super-low 10p rate of income tax.
A senior source told the Standard: "Clearly the Government has done a lot for families with children and special groups like pensioners, and now it is likely to do something for other groups." About 1.1million people who lost over £100 each from the 10p rate being abolished did not benefit from the compensation package that was rushed out earlier this year.
They were among the poorest households affected but the compensation went to people on the basic rate of tax.
The Chancellor is this week working on details of a wider package of tax cuts and spending measures designed to stimulate the economy and shorten the recession.
Reports have suggested it could amount to £15billion, funded by higher borrowing. But the Opposition seized on an admission from Employment Minister Tony McNulty that taxes may have to rise in future years to repay the loans.
Gordon Brown will fly to America tomorrow for a global summit on the economic crisis where he will urge other countries to inject money into their own economies at the same time.
The worry among analysts is that if Britain goes it alone, imports will be sucked in and the value of the boost will be diminished.
Tax cuts for poorer households and pensioners are seen as the most effective way of refloating the economy because they tend to spend rather than save any extra.
Reader views (1)
Why new relief for the poor? What about us not-so poor, but who see increasing amounts of our salary leaking in the direction of utility companies, oil companies and the supermarkets, not to mention ever increasing taxes and duties?
I am still waiting for a political party that realises that the more money I have in my pocket, the more likely I am to use it to boost the rest of the economy.
- Nobby Clark, Perth, Scotland
