Brown aims to spread a little seasonal cheer


Press Association

The Government is preparing to unveil multi-billion pound pre-Christmas tax breaks after Gordon Brown claimed world leaders had signed up to his blueprint for reviving the global economy.

Downing Street sources indicated that the reductions would be targeted at low-income families, probably through the tax credit and winter fuel payment systems.

Along with increases in spending, the “fiscal stimulus” package could be worth between £15 billion and £30 billion – all funded through extra state borrowing. Depending on how much was directed towards lowering taxes, the average family’s bill could be slashed by up to £1,000.

But the Tories launched a furious attack on the principle behind the plans, insisting the Prime Minister was trying to “max out the credit card” at the expense of future generations.

Shadow chancellor George Osborne ruled out either proposing “unfunded” tax cuts, or supporting the Government’s package – due to be unveiled in the Pre-Budget report next week.

“We are warning the country that Gordon Brown is abandoning fiscal responsibility and when a government does that it stacks up debt for future generations and stacks up tax rises for future generations as well,” he told BBC One’s Andrew Marr show. “The choice is going to be funded tax cuts from the Conservative Party, and a tax con by the Labour Party that has abandoned 15 years of rhetoric on fiscal stability.”

The comments risked infuriating Conservative right-wingers, some of whom support the idea of upfront tax cuts and find themselves arguably more aligned with Labour than their own leadership.

Mr Osborne also questioned Mr Brown’s assertion that the G20 had accepted his call for co-ordinated cash injections and tax cuts in order to kickstart growth.

The premier said the gathering in Washington had made an “historic” pact to work together on fiscal measures, and insisted countries would be bringing forward their own plans over the coming weeks. But Mr Osborne claimed the final communique from leaders indicated otherwise. “It is three and a half thousands words long, has 21 words on fiscal stimulus, and says it should be done where appropriate and providing it is consistent with fiscal sustainability,” he said.

“Gordon Brown told us before going to Washington that it was all about getting a global agreement for a fiscal stimulus package. He has not done that.”

As the differences between the two main parties on how to tackle the economic downturn deepened, Chancellor Alistair Darling accused the Tories of lacking “judgment”.

“When you are in an economic situation like this it is right to do everything you can to help people get through a difficult period but it is also right that you do things that will help the country as whole get through it more quickly than otherwise,” he told BBC One’s Politics Show.

China, Japan, Germany and Australia are among the countries which have already announced stimulus packages.