Economic recovery plan, Part 2

Governments can’t now stop the global recession happening, but they can make the downturn less damaging.

Two weeks ago, I outlined my party’s economic recovery plan based on tax cuts (visit www.edwarddavey.co.uk for details), but since then Gordon Brown has set out an alternative – a massive increase in public spending on building projects.

Which plan makes more sense?

Of course, unless we get big cuts in interest rates, neither can work. That’s why the Liberal Democrat Shadow Chancellor, Vince Cable, has led calls for rate cuts to help people struggling with mortgages and businesses wanting loans from reluctant banks.

Yet there’s still the choice: targeted tax cuts or even more building projects.

Tax cuts have a key advantage: they work quicker.

It can take years for new building projects to begin – after the design, tender and planning stages. Tax cuts start working almost as quickly as interest rate cuts.

The argument for Brown’s plan is that tendering in a recession, when construction firms compete more fiercely, produces value for money.

Yet the Government could still tender now – get good prices for projects Britain needs in the future but focus early give-aways on tax cuts. People need cash in their pockets now.

Just like businesses.

That’s why I suggested to Kingston Council they promote an existing tax relief for small business. In 2003, I sat on the Local Government Bill Committee, that brought in Small Business Rate Relief, to save firms up to £1,100.

There may be up to 750 local firms eligible who haven’t claimed. The great thing for Kingston is, this tax relief for our small firms won’t cost local taxpayers a penny!