International

Package to fight U.K. recession

LONDON: The British government on Monday announced a series of unfunded tax cuts amounting to more than £15 billion as part of an emergency package to fight recession.

These included income-tax giveaways for low-income groups and a cut in VAT to stimulate the economy.

A series of measures to help small businesses and homeowners with mortgages were also announced. The package is expected to push up government borrowing to more than £100 billion next year, prompting accusations that it was “borrowing” its way through the recession.

The Tories warned this would mean a “tax bombshell” after the recession as the government would be forced to raise taxes. They said the proposal to raise tax for the wealthy would not yield enough to finance the borrowings. “They might be talking about tax giveaways but everybody knows that they’re throwing money at us now, to take away at a later date,” said Tory leader David Cameron.

Prime Minister Gordon Brown said: “To fail to act now would not only be a failure of economic policy but a failure of leadership. Doing too little too late would mean more damage and more deterioration.”

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