With talk of recession starting to bite, Chancellor Darling has something of a mountain to climb tomorrow when he delivers his pre-budget report.
And with borrowing this year around eighty billion pounds, and David Cameron talking of one hundred billion next year, it’s difficult to see where the leeway is for Labour to pull anything out of the bag.
This week Gordon Brown was talking of a ’stimulus’ for the UK economy. The head of the European Bank argued that such stimuli were unlikely to kick start the economy when taxpayers realised they would ultimately have to foot the bill for this action through higher taxation.
It has been suggested that the VAT rate might be reduced to fifteen percent – a move with which former Chancellor Kenneth Clarke agrees in principle, but only “if it’s affordable”, while David Cameron feels this will add a further twelve billion pounds to public borrowing
With room for manoeuvre limited, Mr Darling will have to pull a pretty impressive rabbit out of his hat tomorrow.
Time will tell.
