Britain’s Prime Minister is expected to defend a plan to pour more than 25 billion euros of borrowed money into the economy. As new tax cuts are expected to be unveiled tomorrow, Gordon Brown will tell business leaders he has to act now to prevent permanent repercussions.
There are only weeks left to reassure Christmas shoppers, and Chancellor Alaistair Darling believes a 23 billion euro inject will do it. The Conservative opposition claims it is irresponsible.
Justine Greening, the shadow Treasury spokesperson, said: “This government’s only answer to the problems that they have got our economy into is more debt, and I think that whoever you talk to, they don’t have to be an economist to see that more and more and more debt simply isn’t sustainable.”
The move would send Britain’s budget deficit ballooning to around 140 billion euros. The government says it has no choice.
Harriet Harman, the Deputy Leader of the Labour Party, said: “We cannot stand by and do nothing now . I mean this is a big tide which has come into our economy and we can’t just say well you’ll just have to wait and things will get better in two or three years time.”
Sales tax is expected to be reduced to 15 per cent from 17.5 per cent in the hope the British public will start spending again. The country is on the verge of, or already in, recession depending on which figures one reads.