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Tory party attack the government's proposed tax cuts

The Conservative party has tonight attacked the government's rumoured £16 billion tax giveaway which is expected to be announced this week by Alistair Darling. One move appears to be the reduction of VAT from 17.5% to 15% overnight with money being placed back into the pockets of consumers at the earliest opportunity. The only downside for the government will be the fact they will have to admit that borrowings are set to hit £117 billion over the next two years which is the equivalent of £4000 for every taxpayer in the UK.

In what is being called a "boomerang budget" there are strong concerns in industry that the tax giveaways of today will mean higher and higher taxes in the future. Many retailers have also suggested that the VAT reduction will have very little impact on the high street as the recent 25% discount days have done very little to lift the mood.

In many ways the government is in a no-win situation because to make any structure work to its full potential there needs to be some kind of increase in economic activity and increased lending from the banking community. As yet these two situations have not happened and the authorities are looking for ways to force a reaction.

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