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PM Gordon Brown today promises immediate help for every family in credit-crunch Britain on the eve of his 'spend now pay later' giveaway.
Writing exclusively in the News of the World, the PM pledges tax cuts to help people pay bills and keep jobs and homes.
But any tax cuts now will have to be paid for by tax rises and spending curbs in the future.
The PM and Chancellor Alistair Darling will use tomorrow's pre-Budget report-a mini-Budget-to announce tax cuts and increased spending worth billions. They will:
CUT VAT by 2.5 per cent to encourage consumer spending.
INCREASE the state pension by between £4 and £5 a week.
INTRODUCE temporary tax cuts for low-income families, who are more likely to spend and give the economy a boost.
CANCEL planned tax rises on cars and small businesses and cuts in tax allowances.
INCREASE spending on schools, hospitals and transport projects.
The government is also expected to retain the £600 increase in the personal allowance for basic rate taxpayers -raised for one year after the row over the 10p tax rate cut- for three more years.
There will be increases in tax credits for poor families and a big hike in child benefit.
The government will call on banks to freeze overdraft charges for small businesses. NatWest and the Royal Bank of Scotland will today announce they are doing just that. Brown and Darling will tell other banks to follow suit.
Darling will also announce that struggling homeowners will be given three months' grace before lenders repossess their homes, giving them time to get financial help.
Schemes allowing owners to sell part of their homes to councils and help those who have lost their jobs with mortgage interest payments will be extended. And bailed-out banks could be threatened with full nationalisation if they do not increase lending.
The rescue will increase national debt to record levels, with Britain set to borrow up to £120 billion a year by 2011. Taxpayers already spend over £300 a year EACH just on the interest on national debt.
But Mr Brown insists borrowing more than all previous UK governments put together is the only way out of recession.
I'll give help when you need it
THESE are extraordinary times for our economy. And at times like this families and small businesses need to know their government is on their side.
Like every country in the world, we are being hit by the global downturn that started in America. I know how worried many people are about their jobs, making ends meet and about the security of their homes.
No politician can promise to stop the difficult times, but I can promise that we will do everything we can to help people get through them fairly.
I want every household facing difficulty at this time to know we are ready to help and are on their side.
We have already taken action to support families and businesses most affected by the shock - £120 this year to 22 million basic rate taxpayers, freezing fuel duty and stepping in to stabilise the banks.
But it is clear we need to do more. The root cause of the problem is the credit crunch. That's why we need to get the banks lending again to families for mortgages.
They need to start lending to small businesses too and reduce the cost of their overdrafts. Already the Bank of England has cut interest rates to their lowest levels for decades.
But most international experts accept that will not be enough. We need to take urgent action now to boost our economies. And in Britain we can afford to do more now because of the tough action we have taken over the past ten years to get our national debt down and ensure inflation remains under control.
If we do not act now the downturn will be longer and more severe. A prolonged recession means people out of work longer, more repossessions, and businesses taking longer to start growing again.
We all remember what happened in the 1980s and 90s when the Conservative government sat on its hands and let people fend for themselves. It took us years to recover.
We will not repeat those mistakes.
That is why the Labour government will take action in a fair way to give people real help now, when they need it the most-and not just let the recession run its course.
By acting now, we can ensure the economy gets back on track faster.
I know the first instinct of families feeling the pinch is to tighten their belts. And the government must do its bit too. Tomorrow we will set out the tough action we're taking to ensure the taxpayer gets the best value from every pound spent. But we also need to help people now.
There is no doubt that this is a crucial time for our economy. Our plans will set the right course for Britain now and long into the future.
It is the best way of securing our long-term prosperity. The alternative - the "do nothing, let the recession run its course" approach-is what British people truly cannot afford.
That would be the most costly and damaging option of all.
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This article has 19 comments
Unconvincing incompetent & insincere.Brown is incapable of relating to peoples' concerns and problems anxious to continue his inept game of politics.He makes Blair seem honest!
By p.doff.. Posted November 29 2008 at 9:07 AM.
im am expat who lives in philippines and watched my hard earned pension drop a third in exchange rates with philippine peso its disgusting the goverment needs to stp borrowing and tell the world markets that the u k is to start paying back the debt
By mal.. Posted November 24 2008 at 11:44 AM.
Brown, you were Chancellor for 10 years and all you did was tax, borrow and spend. You wasted shedloads of OUR money and now, when we need some to help kick-start the economy there isn't any. You've been the biggest disaster this country has ever had - even worse than Healey. Now you intend getting us even further into debt. This temporary handout has got nothing to do with 'helping the UK' and everything to do with bribing the voters to try and save your own skin.
By Boudicca .. Posted November 23 2008 at 9:03 PM.
labour has spent loads and thats true,but they had to pump millions into areas that the torys neglected.
the torys will never ever help the ones at the bottom they ,by instinct,keep them down in order to pay for the lucky ones who they hope will re-vote tory.does nobody remember how they divided society into the im allright jacks and the poor? dont let it happen again.
By bob moore.. Posted November 23 2008 at 9:20 PM.
What annoys me about our PM is that he thinks I am an idiot. One in 6 people are in debt the other 5 are savers. Reduced rates mean less interest but this is never mentioned. Then we shall be expected with savings made during the good times to pay of the government self inflicted debts. Now we are told to spend our money to help this idiot to be voted in for another term. Never mind the polls the real and honest people in the UK will out this idiot. BRING ON THE ELECTION at any time PM lets see how brave you are and if the country does agree with your fiscal bribery.
Give Cameron a chance like we did with Tony Bliar.
By J A BROWN.. Posted November 23 2008 at 8:13 PM.
that will get all the chavvy single mums and thier dosser boyfriends back to work, give them more money then they have even less of an incentive to work good thinking! all of us honest hard working people can pay for it for a change, while the freeloaders pay nothing back. This country is a mess! excuses excuses excuses, 11 years of mismanagement by the labour party, the sooner we can vote them out the better what a waste of time
By bill.. Posted November 23 2008 at 3:01 PM.
Gordon Brown
This country is in a mess people are losing their homes their jobs their pensions cant afford gas and electric bills unable to petrol for their cars, brown dangles and carrot we bite and we have to repay with interest, i'm leaving this war torn country to a better life in New Zealand
I'm ashamed to be British we have been sold down the river dont matter who's in power, we can't trust them
By Mr Barry Richardson.. Posted November 23 2008 at 2:53 PM.
So if Brown managed the economy so well, why is he having to cripple us for a generation with debt to provide a stimulus that probably will make no difference at all? All he is doing is try to save his reputation. If he was serious about serving the best interests of the country he would get the public sector to cut costs like the rest of us are doing.
By David Williams.. Posted November 23 2008 at 1:43 PM.
What good are tax credits to the very people who need help most i.e those too poor to pay income tax such as pensioners. The winter fuel allowance is per pensioner house hold not per pensioner and had the £10 christmas box intruduce by Heath's Conservatives kept pace with inflation it would be worth nearly £300 per two pensioner household now. Brown Shafts the pensioners yet again.
By G.Norman.. Posted November 23 2008 at 1:12 PM.
the guy is trying his best.the torys did not care in the 80s.
simple really
By bob moore.. Posted November 23 2008 at 12:16 PM.
the major difference between this calamity and what happened in the past was that most of the lasting damage occurred in the North East and the South West; with Wales and the Midlands also feeling the pinch. Now its the turn of the South East corner where Brown and Blair have spent £billion's of the investment for the future on cutting the time to travel from London to the Channel Tunnel by 15 minutes than they have put to one side for the whole of the North East. I'm sure that they think it was money well spent especially as there are no jobs in this country and this will allow the south to commute to Europe every day! When will he save money by taking our troops out of war zones and stop building war machines like nuclear subs for hundreds of millions of pounds and use it to bring the rest of the country into the modern world economy.
By dave preston.. Posted November 23 2008 at 11:58 AM.
The recession of the early 90's, and the tough action taken by the Tories, remember "If it isn't hurting it isn't working", is what set the foundation for those 16 years of uninterrupted growth in the economy. The economy was in excellent shape when Labour came to power - look what they have done, put us right back to square one. But this time it is far far worse because we have billions of off balance sheet borrowing.
Gordon Brown castigates the banks for their lack of transparency and the off balance sheet transactions that caused them so much of a problem; yet his Government, with PFI, and unfunded pensions, is doing exactly the same thing. Now this on balance sheet borrowing by the Government will be on a larger scale than that of the last Labour Government of the 70's, that led to Britain having to go cap in hand to the IMF.
Like then we had a Sterling crises - lets see how the markets react to Browns 'rescue' package.
There is only one thing that this package is designed to rescue - his Premiership.
Before the credit crunch hit eceryone knew the UK economy was about to hit the rocks with tax increases or spending cuts needed as spending had got out of control under this Government.
The credit crunch, coming when it did, at a time that the UK was already facing it's own personal mini downturn, has just made it worse.
The UK is the worse placed major economy to deal with this.
By Eddie.. Posted November 23 2008 at 10:58 AM.
Is this clown for real, or what! He's now claiming the opposite of what everyone knows is the truth. How on earth can he say - "And in Britain we can afford to do more now because of the tough action we have taken over the past ten years to get our national debt down and ensure inflation remains under control." I hope that Cameron asks him about the "action" he has taken during the last ten years at PMQs' on Wednesday. We know he will not answer the question, because he can't and we all know he did nothing. He ought to stop harping back to the last Conservative government also because the last time our Balance of Trade was in a plus with the rest of the world was under the conservatives in 1997. For every month of NuLabour's tenure these figures have been in deficit. These are accumulative amounts and the horror really becomes a nightmare when you add them up!
By Ken Johns.. Posted November 23 2008 at 11:04 AM.
Thank you, Prime Minister. You are going to take money from the ants and give it to the grasshoppers.
I save hard, deny myself pleasures, and now you are going to punish me and invest it in (or rather, spend it on) people who do not.
Stop blaming the Conservatives - that was a long time ago. You have had plenty of time, and all the power you wanted, to correct any of their wrongs. You are like a child blaming another for a broken vase. It smacks of cowardice.
By Richard Hertz.. Posted November 23 2008 at 11:02 AM.
Is Brown completely crazy, or what? Every time he opens his mouth he comes out with the most outlandish statements. While everybody knows what he has been doing over the last 10 years he is now trying to tell us:-
"And in Britain we can afford to do more now because of the tough action we have taken over the past ten years to get our national debt down and ensure inflation remains under control."
It's nothing short of incredible that he now claims that in the last 10 years he has done the opposite of what we all know! Has he no shame? And to claim that the Conservative government sat on its hands during the 80's and 90's is complete rubbish. The last time our trade with other countries was in plus figures was in 1997 under the Conservatives. In every single quarter since NuLabour came to power the country has been in deficit. The Office of Information publishes these figures, and oh yes, they are cumulative so that you need to add them all together to see the true picture!
By Ken Johns.. Posted November 23 2008 at 10:51 AM.
Which planet does gordon brown live on? he spent 10 years borrowing and spending now he wants to fix it by .......borrowing and spending even more .
madness.
By Mitch.. Posted November 23 2008 at 9:49 AM.
I Admire Gordon Brown he has managed to convince every body that all these problems have nothing to do with the fact that this labour party has done irripairable damame to this country both financiallyand socially,if the british people vote them in for another termgod help them they will need it
By David Citrone.. Posted November 23 2008 at 8:40 AM.
we are doomed with broon doomed,
the man is on a diiferent planet from the people who are suffering job loses ,losing their homes,rising heating and food costs,this babbling idiot is reduce to roaming the globe with his begging bowl appealing to oil rich countries for funds
By steve connell.. Posted November 23 2008 at 7:41 AM.
Idiot we are in this mess because banks and financial institutions were encouraged to loan to people who couldnt afford to repay and now the Government is going to borrow evan more than it can afford. Before the credit crunch we were going to have record borrowing to bribe voters and now that is extending further but what the hey when they are voted out it will be the next Government who have to make the tough decisions to try to straighten out 11 years of mismanagement
By Frank Cannon.. Posted November 23 2008 at 1:21 AM.