You can keep your VAT reduction, give us tax cuts

7.53.00pm GMT Sun 23rd Nov 2008

It is widely tipped that Gordon Brown and Alistair Darling will lower VAT from 17.5% to 15% in the pre-budget report - this will cost about £12.8billion and achieve, oh very little. the reduction in prices will be so tiny as not to be noticed and the consumers will not be encouraged to spend more.

A reduction in the basic rate of Income Tax however will be noticed in pay packages and feel like people have more money (as they will), this feel-good (or at least not so bad) factor and the extra money could encourage people to spend.

If Gordon or Alistair are reading this it's not too late to change your mind, how about a 4p cut in the basic rate and pay for it later (or even some now) with an increase tax-take on the richest and a move to environmental taxes (I have heard these policies somewhere before).

Of course the real answer is to scrap the present tax and benefits system, introduce a Citizen's Income and have a real graduated tax rate regieme.