Record numbers of UK consumers are now in need of debt advice or are already on debt management programmes and IVAs. Unemployment is set to rise, small businesses are failing on a daily basis and the prospect of a long, hard recession is looming. We are currently faced with the worst economic outlook for nearly two decades.
Gordon Brown and the chancellor, Mr Darling, are facing Labour’s biggest challenge to date and look likely to fight the recession head on with tax cuts that will hopefully encourage hard up consumers to spend Britain out of the current financial crisis. The national debt will have to increase to cover the cost of the proposed cuts, but as is the case with all debts, they have to be repaid at some point and it is the chancellors plan that this can be achieved by increasing tax on the well off. Income tax for people on more than £150k is predicted to increase to 45% should Labour win the next election.
The conservatives have criticized the plan, which is hardly surprising since they never have anything nice to say about Labour anyway. Mr Cameron described the proposals as tax cons, not tax cuts and went on to say that the government is throwing money at us now simply to take it back from us at a later date.