Spending, Lending or Cutting - How Shall We Boost Economy? A Political Consensus Is Emerging That Tax Cuts Are Required to Stimulate the UK Economy. but What Does Business Think? and Is Fiscal Policy the Answer?

The Journal (Newcastle, England), November 12, 2008 | Go to article overview

Spending, Lending or Cutting - How Shall We Boost Economy? A Political Consensus Is Emerging That Tax Cuts Are Required to Stimulate the UK Economy. but What Does Business Think? and Is Fiscal Policy the Answer?


Byline: Peter McCusker reports

AT the height of last month's banking crisis, the Government signalled it was considering a splurge on public expenditure projects to help alleviate a recession.

At the time, many economists and business leaders argued that tax cuts were a better way of putting money in people's pockets to stimulate economic activity.

In particular, the big drawback of major spending projects is that although they can create a lot of jobs, it can take time for the effects to be felt, especially with the planning process often holding schemes back.

Now Prime Minister Gordon Brown has confirmed the Government is to look at putting more money into the economy by tax cuts or public spending rises.

And speculation mounted yesterday that a package of tax cuts is on the agenda - to be announced in this month's Pre-Budget Report.

Yesterday the Conservatives said 350,000 new jobs could be created by giving National Insurance holidays to companies taking on staff who have been unemployed for three months, with the Liberal Democrats also favouring further tax cuts.

And this renewed emphasis on fiscal policy to stimulate the economy has been generally welcomed across the North East business community.

Colin Stratton, the Federation of Small Businesses regional chairman, said: "We are encouraged by suggestions of tax breaks for small businesses.

"We feel a six-month VAT holiday would provide welcome relief to the UK's 4.7 million small businesses which are struggling with rising costs.

"We also are aware that 90% of all employers have fewer than four members of staff, so the plans to cut their National Insurance contributions will help shore up vital funds."

David Elliot, tax partner at KPMG in Newcastle, added: "The key to any tax-cutting measures are that they are easy to implement and easy for businesses to understand.

"There is scope under EU rules for VAT to be levied at 5% on a number of things, such as renovating dwellings. Something like this could certainly help the construction sector."

However, one North East economist believes a purely monetarist response is required to address the UK's current economic problems, as a programme of tax cuts and increased public spending will lead to falling share prices and asset values.

Thomas Renstrom is a senior lecturer at Durham University Business School and is adamant that the way to deal with the looming recession is to focus on maintaining low interest rates. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Spending, Lending or Cutting - How Shall We Boost Economy? A Political Consensus Is Emerging That Tax Cuts Are Required to Stimulate the UK Economy. but What Does Business Think? and Is Fiscal Policy the Answer?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.