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Tories propose business tax cuts Tories propose business tax cuts
(about 2 hours later)
David Cameron has unveiled plans to offer National Insurance breaks to firms which employ people who have been unemployed for more than three months.David Cameron has unveiled plans to offer National Insurance breaks to firms which employ people who have been unemployed for more than three months.
The Tory leader said the incentive to take on workers would be funded from unemployment benefit savings.The Tory leader said the incentive to take on workers would be funded from unemployment benefit savings.
Mr Cameron said his plan was "fiscally responsible" and questioned how the prime minister would fund tax cuts.Mr Cameron said his plan was "fiscally responsible" and questioned how the prime minister would fund tax cuts.
But Gordon Brown said the figures "simply do not add up" and "a serious policy for serious times" was needed.But Gordon Brown said the figures "simply do not add up" and "a serious policy for serious times" was needed.
Mr Brown has hinted at possible tax cuts in the pre-Budget report. The Lib Dems have already pledged tax cuts for low and middle income earners.Mr Brown has hinted at possible tax cuts in the pre-Budget report. The Lib Dems have already pledged tax cuts for low and middle income earners.
'Biggest worries' TAX PROPOSALS Labour: Raised personal tax allowance to benefit basic rate taxpayers by £120 this year after 10p tax row, stamp duty threshold raised, 2p fuel duty rise postponed. Any further cuts expected to come in pre-Budget report Conservatives: Abolish stamp duty for first time buyers on homes up to £250,000, raise inheritance tax threshold to £1m, cut corporation tax from 28p to 25p, encourage council tax freeze. NI cuts for firms who take on unemployed people Lib Dems: Have already pledged tax cuts for low and middle-income families by cutting basic rate from 20p to 16p. They say people on £30k a year would get an extra £1,000 in their pockets. Would remove tax loopholes for the rich. class="" href="/1/hi/uk_politics/7719628.stm">At-a-glance: Party tax cut policy
Mr Cameron said it was "a mistake" to believe the government could "borrow without limit" and said he believed the government had rowed back on publicised plans for a "Keynesian spending splurge".Mr Cameron said it was "a mistake" to believe the government could "borrow without limit" and said he believed the government had rowed back on publicised plans for a "Keynesian spending splurge".
The Conservatives say their plan would create 350,000 jobs and cut firms' tax burden by £2.6bn. In effect, they say, companies would receive a proportion of the benefit payment in the form of a tax break.The Conservatives say their plan would create 350,000 jobs and cut firms' tax burden by £2.6bn. In effect, they say, companies would receive a proportion of the benefit payment in the form of a tax break.
They change their policy every day, they have a new initiative to get them on the news, but it is not serious in measuring up to the problems we face Gordon Brown class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5620&edition=1&ttl=20081110090610">Send us your comments class="" href="/1/hi/uk_politics/7719628.stm">At-a-glance: Party tax cut policy class="" href="/1/hi/uk_politics/7721607.stm">Brown signals possible tax cuts The £2,500 NI credit would be paid in full for jobs of 30 hours a week or more or half that for part-time work of 16-30 hours. It would be limited to a maximum of 20% of the workforce.
Mr Cameron said it costs the taxpayer £8,000 when someone goes on unemployment benefit while their scheme would see £2,500 paid out to firms in NI reductions for each full-time employee taken on. To stop firms sacking workers to hire new ones and claim the credit, it would only be paid to those which had made no redundancies in the previous three, and subsequent three months.
He told a press conference the plans were a "budget submission" - which he hoped the government would implement now, rather than a policy pledge for a future Conservative government, as it was best implemented "at the beginning of a recession". Mr Cameron told a press conference the plans were a "budget submission" - which he hoped the government would implement now, as it was best done "at the beginning of a recession".
"One of the biggest worries for people right now is unemployment," he said."One of the biggest worries for people right now is unemployment," he said.
"Instead of the government paying for them to be unemployed it can be paying for them to be in work.""Instead of the government paying for them to be unemployed it can be paying for them to be in work."
'Fiscally responsible''Fiscally responsible'
He said his plan was "fiscally responsible because the money is only spent if someone comes off the unemployment register ... The saving is made in the current year and the spending is in the current year."He said his plan was "fiscally responsible because the money is only spent if someone comes off the unemployment register ... The saving is made in the current year and the spending is in the current year."
But in his monthly press conference, Gordon Brown dismissed the plan as a "one-off initiative" when what was needed was "a serious policy for serious times".But in his monthly press conference, Gordon Brown dismissed the plan as a "one-off initiative" when what was needed was "a serious policy for serious times".
And he added: "They can't show definitively how they can guarantee to pay for it."And he added: "They can't show definitively how they can guarantee to pay for it."
TAX PROPOSALS Labour: Raised personal tax allowance to benefit basic rate taxpayers by £120 this year after 10p tax row, stamp duty threshold raised, 2p fuel duty rise postponed. Any further cuts expected to come in pre-Budget report Conservatives: Abolish stamp duty for first time buyers on homes up to £250,000, raise inheritance tax threshold to £1m, cut corporation tax from 28p to 25p, encourage council tax freeze. NI cuts for firms who take on unemployed people Lib Dems: Have already pledged tax cuts for low and middle-income families by cutting basic rate from 20p to 16p. They say people on £30k a year would get an extra £1,000 in their pockets. Would remove tax loopholes for the rich. href="/1/hi/uk_politics/7720086.stm">Tories 'to act on unemployment' class="" href="/1/hi/uk_politics/7719017.stm">Brown raises tax cut speculation What people need now, millions of ordinary British families who have been paying too much in tax for too long is a big tax break Nick Clegg href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5620&edition=1&ttl=20081110090610">Send us your comments class="" href="/1/hi/uk_politics/7721607.stm">Brown backs 'unfunded' tax action
"They change their policy every day, they have a new initiative to get them on the news, but it is not serious in measuring up to the problems we face."They change their policy every day, they have a new initiative to get them on the news, but it is not serious in measuring up to the problems we face.
"The problems we face can only be dealt with by a number of measures in both our domestic economy and our international economy.""The problems we face can only be dealt with by a number of measures in both our domestic economy and our international economy."
Mr Brown has hinted that might be possible tax cuts in the pre-Budget report, expected to take place next week and has said it was necessary to maintain spending - and to increase borrowing to do so - to support the economy through its current troubles. He said a fiscal stimulus meant being "prepared to add to borrowing in conditions where you have low national debt"
On Tuesday he said: "A fiscal stimulus means you are prepared to add to borrowing in conditions where you have low national debt."
He said funded tax cuts would not achieve the desired result, adding: "That is not a fiscal stimulus."He said funded tax cuts would not achieve the desired result, adding: "That is not a fiscal stimulus."
The Conservatives say the UK is "one of the most indebted nations on earth" while Mr Brown argues it has "low national debt" and is in a position to "take action".The Conservatives say the UK is "one of the most indebted nations on earth" while Mr Brown argues it has "low national debt" and is in a position to "take action".
John Cridland, of the CBI, said the "imaginative proposals would help some small businesses keep people in work" but David Frost, of the British Chambers of Commerce, said firms were not in a position to start recruiting.
"This policy announcement would have been a valid welfare to work initiative in better times, but it is not a survival tool for small businesses during a severe downturn," he said.
'Big' tax cuts'Big' tax cuts
Meanwhile the Liberal Democrat leader Nick Clegg has said that, under their income tax policies, people earning £30,000 a year would get £1,000 extra in their pocket.Meanwhile the Liberal Democrat leader Nick Clegg has said that, under their income tax policies, people earning £30,000 a year would get £1,000 extra in their pocket.
The party is proposing significant tax cuts for people on low and middle incomes funded by closing tax loopholes for the wealthy, pension allowances for higher rate taxpayers and raising green taxes.The party is proposing significant tax cuts for people on low and middle incomes funded by closing tax loopholes for the wealthy, pension allowances for higher rate taxpayers and raising green taxes.
Mr Clegg has also warned against funding tax cuts entirely from borrowing more money saying: "Our principle is to fund this because we want the tax cuts to be big, they have to be big to have any effect at a time like this, secondly to be permanent. Mr Clegg said tax cuts had to be "big" to have any effect and accused Labour and the Conservatives of "tinkering and timidity" when what was needed was a dramatic lowering of basic rate income tax.
"If you do it all from borrowing as the government seems to want to do then it's just a tax cut here today, gone tomorrow." He accused them of a "a cynical raising of hopes" and expectations.
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". "What people need now, millions of ordinary British families who have been paying too much in tax for too long is a big tax break."
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 Daily Telegraph reports that one of the key elements of the government's tax-cutting package will be a decision to postpone controversial planned increases in vehicle excise duty - a move which its headline describes as a "U-turn" on a "poll tax on wheels".
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.
The Tory proposals come as a poll for the Times suggested 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 suggested their lead over Labour has fallen sharply in recent weeks - from 15 points a month ago to six points now.