6:24pm Monday 24th November 2008
By Alex Hayes
PLANS the government hopes will drag the country out of the credit crunch were unveiled today.
Chancellor Alistair Darling stood up in the House of Commons and delivered the pre-budget report, which set out a raft of measures designed to get people spending money again.
One key measure unveiled is a reduction in the rate of Value Added Tax (VAT), from 17.5per cent to 15 per cent from next Monday, December 1.
The move could lead to prices being slashed in many high street stores, although it remains to be seen whether struggling retailers will pass the savings on to customers.
People earning more than £150,000 per year will also be hit with a new rate of income tax, with 45p in every pound they earn going to the Government from April 2011, to help the government repay the extra money they are going to borrow to finance an increase in public spending.
The amount of National Insurance businesses and employers pay will also increase by 0.5 per cent, although Mr Darling promised this would not mean an increase for anyone earning less than £20,000.
Other plans outlined in the speech included an increase in pension credits by six pounds a week for single people, and nine pounds for couples, and a one-off payment of £60 in January.
Controversial changes to car tax rates will also be phased in, so people driving more polluting or older cars will not be hit with a big increase next year.
There will also be £3bn invested in schemes including increasing the amount of social housing being built, and improving capacity on the motorways.
What do you think of the measures? Will they encourage you to spend more money in the shops?
Leave your comments below.
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