Responding to the Chancellor’s pre-Budget report today, Cable said the country was in the grip of a “national economic emergency” and argued that the temporary cut in VAT was not enough to boost the economy.
He said: “What is required alongside radical cuts in interest rates, radical action on bank lending is a serious tax cut concentrating on the low paid.
“The Chancellor has come forward basing his plans mainly on a temporary small cut in Value added tax.
“What I fail to see is how the economy gets a major stimulus for example with a £5 cut in a £220 imported flat screen television.
“Surely it would be more sensible to put money directly in the pockets of low paid workers by cutting their income tax, not the pathetic £25 that they have been offered and if they earn over £20,000, the prospect of tax increases.”
Cable said that despite the Government’s acknowledgement that the tax system is unfair, the Chancellor has not gone far enough to abolish the “plethora” of tax advantages for the wealthy, and called his reforms a “figleaf” for redistribution of wealth.