Labour tax cuts set battle lines
Updated on 24 November 2008
Alistair Darling presents a pre-budget report which is, for all intents and purposes, an emergency budget.
In an historic opening salvo to the commons, the chancellor announced sweeping tax cuts and benefit increases, small business loans and savings bonuses.
It's a massive gamble that will increase government borrowing to record levels, but has also drawn the battle lines on which the next election will be fought.
The pre-budget report represents a £20bn cash injection into the economy. The biggest change is that from Monday VAT will be cut to 15 per cent.
That's £12.5 billion to consumers' pockets.
Increases in child benefit and the state pension will be brought forward to January and pensioners will also get a one off £60 cash payment in the new year.
Those earning more than £150,000, however, will pay a new income tax rate of 45 per cent, after the next election.
And everyone who pays national insurance will see their payments rise by 0.5 per cent from April 2011.
Live discussion
Jon Snow is joined in the studio by the Chief Secretary to the Treasury, Yvette Cooper, the Liberal Democrats Treasury spokesman, Vince Cable and from Westminster the Shadow Chief Secretary to the Treasury, Phillip Hammond.
