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PLAN B

By David Vance On February 1st, 2012

No, No, No! 

The Institute for Fiscal Studies has urged the Government to consider a £20bn fiscal stimulus in the event of the eurozone break-up, saying a possible plan B should be outlined in the Budget.

That is EXACTLY what we do not need WHEN the Eurozone breaks up. Once again some people insist that you can spend your way out of recession when in fact it is the spending that weakens the economy in the first instance. The recipe to keep UK fortunes on the up once the Euro goes down is so simple that only a politician could miss it;

1. Cut personal taxes and allow people to keep more off their own cash.

2. Cut Corporation Taxes so business can invest in growth.

3. Reduce the State sector at all costs, cut Welfare, shrink Government interference in as many areas as possible. Foreign Aid needs to be cut and Quangos need axed.

4.  Accept that economic growth is the product of a motivated and free economy and not within the remit of ANY Government. The role of Government is to help create the conditions to enable enterprise to grow.

7 Responses to “PLAN B”

  1. 1. Cut personal taxes and allow people to keep more off their own cash.

    Agreed, but any cuts should be to benefit the lower paid. Lib Dem policy is to increase the tax threshold from £7,475 to £10,000 while reducing the higher rate threshold by the same amount so that the millionaires do not benefit. And of course the lower paid spend their income, as opposed to the millionaires who tend to save a good bit of it in “tax havens”.

    2. Cut Corporation Taxes so business can invest in growth.

    The government is already cutting the main rate from 28% to 25% over three years. That is lower than most large economies. And of course the small companies rate has been cut from 21% to 20%.

    3. Agreed.

    4. Agreed, but try telling that to politicians who are out to buy votes.

  2. 1. Cut personal taxes and allow people to keep more off their own cash.
    2. Cut Corporation Taxes so business can invest in growth.

    Errm, that is a fiscal stimulus.

  3. Frank O’Dwyer –

    Not really. The “fiscal” part of fiscal stimulus implies increased government spending (as opposed to less looting).

    It’s true that the economy is in desperate need of the state not looting gargantuan amounts of our wealth, and the economy would be all the better for it, but it’s not fiscal stimulus.

  4. Pete Moore

    Fiscal stimulus can be either tax cuts or increased state spending (financed by borrowing) or any combination. From the horse’s mouth: “Government measures, normally involving increased public spending and lower taxation, aimed at giving a positive jolt to economic activity.”

  5. Peter –

    Yes, but the phrase has come to imply directed and increased state spending. If the IFS means stimulus via lower taxes then it ought to be that specific.

  6. Pete,

    “The “fiscal” part of fiscal stimulus implies increased government spending”

    Fiscal just means it has to do with government revenue – either reduction in tax or increased investment is a fiscal stimulus.

    Read the link – the IFS say as much, the stimulus they suggest could either be by cutting VAT and employer NI (cutting taxes), or investment (increased public spending).

    I’m not saying anything about the merits of either as I don’t know very much about it (and I suspect neither does anyone else) but that is what it means.

  7. The only thing the Irish want is a “referendum” on EVERYTHING, which might cost them to lose benefits they so eagerly, willingly and unconditionally accepted from the European Union 20-years ago (Germany & France mostly).

    That’s cause, like the children they are, will not give up the toys once they have been given them.

    The Irish aren’t willing to fight for a National identity and fiscal independence, but will die to the last citizen for their very own bloated tit on the E.U. cow.