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Brown signals possible tax cuts Brown backs 'unfunded' tax action
(about 1 hour later)
Gordon Brown has signalled possible tax cuts in the pre-Budget report, saying he wanted further "fiscal stimulus" to "get the economy moving again". Gordon Brown has signalled his backing for "unfunded" tax cuts in the pre-Budget report to combat recession.
But the PM said any UK action would not work unless it was matched by similar moves around the world. He told a No 10 media conference he wanted a further "fiscal stimulus" to "get the economy moving again".
He also defended plans to borrow money to boost the economy amid Tory claims it would lead to future tax rises. He said it would "initially" be unfunded but claimed the Tories, who accuse him of a planning a borrowing "splurge", also had unfunded plans.
He denied the UK already had huge debts, insisting it was low compared with other industrialised nations. The Tories have proposed "targeted" tax cuts which they say will not need rises in borrowing to fund them.
Conservative leader David Cameron said his proposals to give tax breaks to small businesses who take on unemployed workers were "fiscally responsible".
And he said it was "a mistake" to believe the government could "borrow without limit" and spend its way out of a recession.
'Low debt'
But Mr Brown said Mr Cameron's proposal was "an expensive one that doesn't necessarily guarantee that more jobs will be created overall".
He also hit back at Mr Cameron's claims Britain had one of the highest levels of debt in the developed world.
He claimed the UK's "low public debt" meant it could afford to borrow money to pump money into the economy.
Pressed on whether there would be unfunded tax cuts in the pre-Budget report, expected next week, he said: "You have to take action that is initially unfunded because that is actually how you do a fiscal stimulus.
"The aim is to get the economy moving forward by higher levels of economic activity and that is precisely what we are doing."
He added: "Most of the Conservatives' tax cuts are also ones that they are unable to fund."
He attacked the Tories' economic downturn policy package, saying "it's confused, it's contradictory, it's ill thought-through, it's an initiative-a-day but actually not getting to the substance of what the real problem is".
He said other countries around the world - including incoming US President Barack Obama - were planning a "second fiscal stimulus" and Britain had to be seen to be leading the way.
"The more countries that are involved in this, the better it is going to be for the world and for us," he said.