Gordon Brown has decided that the “global financial crisis” warrants some tax cuts. Better late than never;
Ministers said a combination of targeted tax cuts and a speeding up of government building projects – to be financed by higher borrowing – would complement the interest rate reductions in a three-pronged strategy that would hopefully allow Britain to bounce back as quickly as possible from the looming recession. “We have got to use all the levers at our disposal,” one said.
Critics (eg the opposition) complain that the extra borrowing is more significant than the tax cuts and that it will simply mean higher taxes in the future. They may, however spending initiatives really need to be assessed on their merits. Expenditure on infrastructure (buildings, bridges, roads etc) is better than most other forms of government spending.