People 'must be encouraged to work, not just spend'

Posted on 26 November 2008

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The pre-budget report should have improved people's incentive to work rather than to spend, according to Defaqto.

Commenting on the announcements made by chancellor of the exchequer Alistair Darling on Monday, economist Michael Baxter said the economy would benefit most from measures geared at encouraging people into the workplace.

He claimed that a more significant reduction in tax rates, including a lowering of National Insurance contributions, would have been the best way forward for the economy rather than cutting VAT.

Mr Baxter added: "If you played around with improving people's incentive to work rather than spend then I think that would have had a more positive effect down the line."

In his pre-budget report, Alistair Darling told parliament that output in the UK is expected to fall in the UK for the first two quarters of 2009.

He claimed that lower commodity prices and lower interest rates will encourage an economic recovery by boosting incomes and helping business profits.

Category: General News

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