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| Tories 'plan to cut business tax' | Tories 'plan to cut business tax' |
| (about 2 hours later) | |
| David Cameron is due to unveil plans to cut business tax as the main parties fight it out over how to help companies and individuals through a recession. | David Cameron is due to unveil plans to cut business tax as the main parties fight it out over how to help companies and individuals through a recession. |
| The Tories will call for a cut in the amount companies pay in national insurance to help them take on staff who have been jobless for three months. | The Tories will call for a cut in the amount companies pay in national insurance to help them take on staff who have been jobless for three months. |
| They would use cash that would have been spent on unemployment benefit, and say the scheme would be self financing. | |
| It would create 350,000 jobs and cut firms' tax burden by £2.6bn, they say. | |
| Gordon Brown has hinted at possible tax cuts in next week's pre-Budget report. | Gordon Brown has hinted at possible tax cuts in next week's pre-Budget report. |
| The prime minister had said he is looking at all options to stimulate the economy, including tax cuts and increases in public spending, as the debate over responses to the downturn heats up. | The prime minister had said he is looking at all options to stimulate the economy, including tax cuts and increases in public spending, as the debate over responses to the downturn heats up. |
| Quick response | Quick response |
| He has not provided any details of what the government plans but, shortly after the Tory announcement, he may come under pressure to do when he holds his regular Downing Street news conference. | He has not provided any details of what the government plans but, shortly after the Tory announcement, he may come under pressure to do when he holds his regular Downing Street news conference. |
| It has been brought forward two-and-a-half hours from its normal midday time so it will take place just an hour after David Cameron has outlined the Tory objectives. | It has been brought forward two-and-a-half hours from its normal midday time so it will take place just an hour after David Cameron has outlined the Tory objectives. |
| The BBC political correspondent Norman Smith said the Tories plan to pay for their tax break scheme by giving firms around a third of the benefit payments that would otherwise go to the unemployed worker. | |
| In effect, companies would receive a proportion of the benefit payment in the form of a tax break, he said. | |
| The Liberal Democrat leader, Nick Clegg, is also due to join the fray, giving more details of the tax breaks his party wants to give to middle class families, funded by closing tax loopholes used by the wealthy. The Tories' measure will be funded by cuts in spending on unemployment benefits rather than an increase in borrowing and will, the party says, be "fiscally responsible". | The Liberal Democrat leader, Nick Clegg, is also due to join the fray, giving more details of the tax breaks his party wants to give to middle class families, funded by closing tax loopholes used by the wealthy. The Tories' measure will be funded by cuts in spending on unemployment benefits rather than an increase in borrowing and will, the party says, be "fiscally responsible". |
| No Tory promise can be taken seriously while their economic strategy remains incoherent Stephen Timms, Treasury minister | No Tory promise can be taken seriously while their economic strategy remains incoherent Stephen Timms, Treasury minister |
| The Tory leader has accused Labour of "complete confusion" over how to deal with the downturn, shifting from support for a "Keynesian" boost in public spending to backing for tax cuts. | The Tory leader has accused Labour of "complete confusion" over how to deal with the downturn, shifting from support for a "Keynesian" boost in public spending to backing for tax cuts. |
| But Labour said the Tories' response to the crisis was "incoherent". | But Labour said the Tories' response to the crisis was "incoherent". |
| "No Tory promise can be taken seriously while their economic strategy remains incoherent," said Treasury minister Stephen Timms. | "No Tory promise can be taken seriously while their economic strategy remains incoherent," said Treasury minister Stephen Timms. |
| "Their incoherence would be a risk to British jobs and economic stability." | "Their incoherence would be a risk to British jobs and economic stability." |
| Waiting game | Waiting game |
| In his annual Mansion House speech at the Lord Mayor's Banquet on Monday, the prime minister said it was necessary to maintain spending - and to increase borrowing to do so - to support the economy through its current troubles. | In his annual Mansion House speech at the Lord Mayor's Banquet on Monday, the prime minister said it was necessary to maintain spending - and to increase borrowing to do so - to support the economy through its current troubles. |
| But he also hinted at possible tax cuts, praising the economic stimulus measures put forward by the US and Germany and calling for "concerted, international" action to stimulate the economy. | But he also hinted at possible tax cuts, praising the economic stimulus measures put forward by the US and Germany and calling for "concerted, international" action to stimulate the economy. |
| The Lib Dems have consistently called on the government to cut taxes on low and middle incomes Nick Clegg | The Lib Dems have consistently called on the government to cut taxes on low and middle incomes Nick Clegg |
| The Daily Telegraph reports that one of the key elements of the government's tax-cutting package will be a decision to postpone planned increases in vehicle excise duty - a move which its headline describes as a "U-turn" on a "poll tax on wheels". | The Daily Telegraph reports that one of the key elements of the government's tax-cutting package will be a decision to postpone planned increases in vehicle excise duty - a move which its headline describes as a "U-turn" on a "poll tax on wheels". |
| The duty increase for higher emissions cars bought between 2001 and 2006 - announced earlier this year - has proved contentious, with the Conservatives describing it as retrospective and unfair. | The duty increase for higher emissions cars bought between 2001 and 2006 - announced earlier this year - has proved contentious, with the Conservatives describing it as retrospective and unfair. |
| Labour has described the report as speculative and said all tax changes must wait until the chancellor's pre-Budget statement when Alistair Darling will update MPs on the state of the public finances. | Labour has described the report as speculative and said all tax changes must wait until the chancellor's pre-Budget statement when Alistair Darling will update MPs on the state of the public finances. |
| The BBC's Nick Robinson said no talk of tax cuts should be taken at face value until the details were forthcoming and people would have to wait several days to learn of Labour's plans. | The BBC's Nick Robinson said no talk of tax cuts should be taken at face value until the details were forthcoming and people would have to wait several days to learn of Labour's plans. |
| The Lib Dems have long called for tax cuts for low and middle income earners to be paid for scrapping tax loopholes for the wealthy. | The Lib Dems have long called for tax cuts for low and middle income earners to be paid for scrapping tax loopholes for the wealthy. |
| The party's leader Nick Clegg said any proposed tax cuts had to be "big, permanent and fair". | The party's leader Nick Clegg said any proposed tax cuts had to be "big, permanent and fair". |
| "The Lib Dems have consistently called on the government to cut taxes on low and middle incomes," he said. | "The Lib Dems have consistently called on the government to cut taxes on low and middle incomes," he said. |
| "It is high time ministers started to listen." | "It is high time ministers started to listen." |
| The Tory proposals come as a poll for the Times has found that their lead over Labour has fallen sharply in recent weeks - from 15 points a month ago to six points now. | The Tory proposals come as a poll for the Times has found that their lead over Labour has fallen sharply in recent weeks - from 15 points a month ago to six points now. |