Parties fight on recession platform
Labour and the Conservatives are releasing rafts of economic policies, both this morning and over the weekend, in what amounts to two opposing ‘recession manifestos’.
Tory leader David Cameron called for a 1p reduction in national insurance to help small businesses this morning.
Labour is considering delaying long-planned expansions of flexible working to take some of the weight of businesses.
Over the weekend, party figures insisted pushing ahead with Labour spending plans – including the refurbishment of hundreds of thousands of schools across the country – would help pull the UK out of a recession, in what appeared to be a return to Keynesian economics.
“I suspect what the chancellor is doing here is trying to sound desperately optimistic by talking about these big spending projects,” Mr Cameron told the Today programme this morning.
“If you want to do something now to help, you’re better off helping small businesses and cutting headline rates of corporation tax,” he added.
Liberal Democrat leader Nick Clegg published a ‘family assistance package’ this morning to help families through the economic downturn.
It calls for a cut in interest rates, tax cuts for low and middle income families, government action to help pay energy bills and the establishment of a nationwide financial advice service.
“The government wants to spend its way out of this crisis without learning from any of its mistakes, while the Tories seem content to fiddle around the edges of business taxation,” Mr Clegg said.
The Conservatives say their national insurance cut has already been fully costed, with the £225 million lost to the Treasury paid for by existing commitments to for tax relief and allowances.
Mr Cameron also wants a six month VAT holiday for small businesses, and a shortening of time within which local authorities have to pay them for services.
This morning, Yvette Cooper, chief secretary to the Treasury, said the government was looking into ways of preventing repossessions, but added it would stop short of introducing new legislation.
Speaking about the Conservative proposal to reduce national insurance, she said: “The Tories are giving with one hand and taking away with the other.”
“The small print that David Cameron doesn’t like to talk about is that, in order to pay for this measure, they would increase taxes for businesses elsewhere.”
