04.10.11
No tax cuts - Osborne
Chancellor George Osborne has stated that taxes will only be cut when the Government can afford it. In a speech to the Conservative Party conference, Osborne declared that there would be no deviation from the deficit reduction plan.
Some of his Conservative colleagues have said that tax cuts would help boost growth and so ultimately help cut the deficit.
But Osborne claimed that it would be wrong to borrow money to fund temporary tax cuts or to increase public spending, as “borrowing too much is the cause of Britain's problems, not the solution”.
He said: “We would be risking our nation's credit rating for a few billion pounds more, when that amount is dwarfed by the scale and power of the daily flows of money in the international bond markets, swirling around ready to pick off the next country.
“We will not take that risk. We are in a debt crisis, it is not like a normal recovery. You can't borrow your way out of debt.
“I'm a believer in tax cuts - permanent tax cuts paid for by sound public finances. Right now, temporary tax cuts or more spending are two sides of exactly the same coin, a coin that has to be borrowed - more debt that has to be paid off.”
Osborne did announce that credit easing was being implemented to cut the cost of borrowing for businesses and to improve access to loans, as well as keeping interest rates low.
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