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| Cameron makes savings tax pledge | Cameron makes savings tax pledge |
| (20 minutes later) | |
| Conservative leader David Cameron has announced plans to help savers who he has described as the "innocent victims" of the economic downturn. | |
| Mr Cameron says he would scrap taxes on basic rate taxpayers' savings and for a rise by £2,000 a year in the level of non-taxable income for pensioners. | |
| The Tories have said the tax cuts will be fully funded, paid for by lower public spending in the current year. | |
| Labour say the Tories are making promises without having the funding. | Labour say the Tories are making promises without having the funding. |
| 'Big change' | |
| Mr Cameron said his plans were designed to create a "less materialistic" society based on a culture of "save, save save" rather than "spend, spend spend." | |
| "We need to make a really big change in Britain from an economy built on debt to an economy built on savings," he said. | |
| Mr Cameron said the tax cuts would be paid for restricting public spending increases in 2009-2010 to 1% in real terms. | |
| This would represent a £5bn cut in public spending from what Labour has budgeted for although health, education defence and international development spending would be left unaltered. | |
| Such cuts in spending were "perfectly reasonable", he added. | |
| Mr Cameron earlier accused Gordon Brown of inflicting a "terrifying" debt crisis on Britain and called the VAT cut a "joke". | Mr Cameron earlier accused Gordon Brown of inflicting a "terrifying" debt crisis on Britain and called the VAT cut a "joke". |
| Mr Cameron told BBC Radio 4's Today that Mr Brown might as well have gone out and burnt the money and said he felt like "shaking the prime minister". | Mr Cameron told BBC Radio 4's Today that Mr Brown might as well have gone out and burnt the money and said he felt like "shaking the prime minister". |
| His criticisms came as both his party and Labour seek to gain the initiative over handling of the economic downturn. | His criticisms came as both his party and Labour seek to gain the initiative over handling of the economic downturn. |
| 'Debt crisis' | 'Debt crisis' |
| Mr Cameron told the BBC: "These are extraordinary circumstances we are facing, very difficult circumstances and we have to be clear about the landscape." | Mr Cameron told the BBC: "These are extraordinary circumstances we are facing, very difficult circumstances and we have to be clear about the landscape." |
| He said government had led the country into a "debt crisis" and the economic downturn was also a key factor. | He said government had led the country into a "debt crisis" and the economic downturn was also a key factor. |
| Calling on Mr Brown to "get with the programme" the Tory leader said what was needed was more saving than borrowing. FROM THE TODAY PROGRAMME More from Today programme | Calling on Mr Brown to "get with the programme" the Tory leader said what was needed was more saving than borrowing. FROM THE TODAY PROGRAMME More from Today programme |
| "We shouldn't use this as an opportunity to tear up the market and go back to 1970s style interventionism," he said. | "We shouldn't use this as an opportunity to tear up the market and go back to 1970s style interventionism," he said. |
| Mr Cameron said the longer Labour are in power, the worse the nation's financial situation will become. | Mr Cameron said the longer Labour are in power, the worse the nation's financial situation will become. |
| The BBC's political editor Nick Robinson said the changes to savings tax rates would create a clear political dividing line, he added, between a Labour government committed to state intervention to inflate the economy and the Tories calling for a smaller state and tax cuts. | The BBC's political editor Nick Robinson said the changes to savings tax rates would create a clear political dividing line, he added, between a Labour government committed to state intervention to inflate the economy and the Tories calling for a smaller state and tax cuts. |
| Meanwhile Gordon Brown has been discussing help for businesses trying to cope with the economic slowdown. | Meanwhile Gordon Brown has been discussing help for businesses trying to cope with the economic slowdown. |
| This is as a prelude to a three-day tour of England and Wales by the prime minister, which will culminate in a jobs summit in Downing Street next week. | This is as a prelude to a three-day tour of England and Wales by the prime minister, which will culminate in a jobs summit in Downing Street next week. |
| 'Better tomorrow' | 'Better tomorrow' |
| Mr Brown said the UK was facing a "testing" year but that Labour's investment in areas such as housing and transport and its planned focus on creating jobs in new sectors of the economy was an "essential" response to the downturn. | Mr Brown said the UK was facing a "testing" year but that Labour's investment in areas such as housing and transport and its planned focus on creating jobs in new sectors of the economy was an "essential" response to the downturn. |
| "I believe with the right policies that we can build a better tomorrow while also immediately addressing the challenges we face today," he told a meeting of business groups and union leaders in London. | "I believe with the right policies that we can build a better tomorrow while also immediately addressing the challenges we face today," he told a meeting of business groups and union leaders in London. |
| HAVE YOUR SAYWe need to concentrate on supporting the wealth creating private sectorBenny, LondonSend us your comments | HAVE YOUR SAYWe need to concentrate on supporting the wealth creating private sectorBenny, LondonSend us your comments |
| To do otherwise and to let the downturn run its course - the approach the prime minister has accused the Conservatives of taking - would be "socially divisive and economically mistaken". | To do otherwise and to let the downturn run its course - the approach the prime minister has accused the Conservatives of taking - would be "socially divisive and economically mistaken". |
| "When markets fail the government has a responsibility to act." | "When markets fail the government has a responsibility to act." |
| The government also said it was mulling over further plans to encourage UK banks to raise lending to firms and households, with Chancellor Alistair Darling stating that pumping more state cash into banks was not the "first port of call". | The government also said it was mulling over further plans to encourage UK banks to raise lending to firms and households, with Chancellor Alistair Darling stating that pumping more state cash into banks was not the "first port of call". |
| And Yvette Cooper, chief secretary to the Treasury, said: "David Cameron talks about the 1970s. The truth is the Conservatives are returning to the worst of Thatcherism in the early eighties with no support for jobs or the economy and cuts in public services as well. | And Yvette Cooper, chief secretary to the Treasury, said: "David Cameron talks about the 1970s. The truth is the Conservatives are returning to the worst of Thatcherism in the early eighties with no support for jobs or the economy and cuts in public services as well. |
| "The Conservatives are repeating their mistakes of the past: if a timely fiscal stimulus of similar scale had been applied at the beginning of the 1990s recession, around 300,000 fewer jobs might not have been lost." | "The Conservatives are repeating their mistakes of the past: if a timely fiscal stimulus of similar scale had been applied at the beginning of the 1990s recession, around 300,000 fewer jobs might not have been lost." |