Britain set to slash VAT to boost spending

Britain set to slash VAT to boost spending

London: Britain was expected to announce a cut in value added tax (VAT) to 15% from 17.5% to stimulate spending on goods and services as the nation faces recession.

A cut in VAT was emerging as a likely centrepiece of the Labour government’s upcoming budget report, British newspapers said today, as Prime Minister Gordon Brown also attempts to further close a gap on the main opposition Conservatives in the polls.

“I want every household facing difficulty at this time to know we are ready to help and on their side," Brown wrote in the popular News of the World weekly tabloid.

“I know how worried many people are about their jobs, making ends meet at the moment and about the security of their homes.

“No politician can promise to stop the difficult times, but I can promise that we will do everything we can to help people get through them fairly," added Brown, whose governing Labour Party was still 11 points behind the Conservatives, according to an opinion poll today.

British finance minister Alistair Darling will on Monday unveil a budget report also expected to outline plans to boost government spending.

Darling, whose official title is chancellor of the exchequer, will present his pre-budget - an outline of his taxation and spending plans ahead of the full 2009/2010 annual budget due early next year.