Buy now, pay later

By William Green on Nov 23, 08 07:24 PM

It's like one of those TV adverts. Buy a washing machine or flat-screen television, and pay nothing for six months.

That seems to be Gordon Brown's strategy when it comes to tomorrow's mini-budget. Tax cuts now and pay later with tax hikes at some date in the future.

A cut in VAT is being predicted in a bid to push up sales in the shops. The belief is that rather than an increase in your pay packet, through a reduction in taxes, this will shore up the collapsing economy.

The thought is that the middle class will simply save any extra tax cut, while the poor will go out and spend. But could this argument be flawed and even patronising for all concerned?

And the other major issue is if people - no matter their background - lose their jobs, how are they going to have any money to spend?

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