Member Article

Darling unveils recession-beating hopes

Chancellor Alistair Darling plans to ramp up the national debt to £682bn to prevent the country sliding into a long, deep recession. In his pre-Budget report Mr Darling outlined a raft of measures designed to maintain employment and pump cash into the economy.

He confirmed a 2.5% cut to VAT from December 1 until 2010 to drive consumer spending. The move is expected to cost the government £12.5bn. And he unveiled a capital spending programme on major projects to renovate the country’s infrastructure, increase the energy efficiency of housing and keep people in work.

He also announced measures to cut tax for low earners and provide relief for those struggling with mortgage repayments. Mr Darling also outlined several ways he would claim back government revenue, including a hike in income tax for the highest earners. From April 2011 those earning more than £150,000 will see tax rise from 40% to 45%.

In response to the announcements, James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “NECC sent a four-page dossier to the Treasury outlining the key areas that the Government could really deliver vital support to businesses. We are delighted that the Chancellor Alistair Darling has responded favourably to all of our proposed measures.

“Moves to help small and medium sized businesses to defer tax payments are to be applauded and the deferment of an increase in small company corporation tax was a positive move.

“It is also very encouraging to see the Government pledging to implement a number of steps to make it easier for smaller businesses to win public sector contracts. This could potentially add hundreds of millions of pounds to the North East economy.”

Colin Stratton, FSB Regional Chairman for the North East of England, said: “The Federation of Small Businesses cautiously welcomes the pre budget report issued by the Mr Darling. We are delighted that the chancellor has taken note of the small business community and promised £1bn for a temporary Small Business Finance Scheme.

“We were also pleased to hear Mr Darling refer to small businesses as the ‘engine room’ of our UK economy. A longer period to pay VAT, corporation tax, income tax, and National Insurance, can only ease cash flow which will boost the North East economy and SMEs within the region.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .