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Labour
Gordon Brown has put his faith in "fiscal activism", unprecedented government intervention partly inspired by Franklin Roosevelt's New Deal in the 1930s. Two key features of this were announced last year - a £500bn bank rescue plan and a £21bn package of tax cuts and spending increases in the pre-budget report, of which the main measure was a VAT cut costing £12.4bn. Brown has said that his spending splurge will create 100,000 jobs. But he has not ruled out going further and ministers are considering additional interventions, including further recapitalisation of the banks and a scheme to guarantee bank lending.
Conservatives
David Cameron has focused on the level of debt as the key economic problem and he has advocated a strategy of "monetary activism" to get government borrowing down, which involves opposing the cut in VAT and proposing curbs on government spending. He has also advocated spending £2.6bn cutting national insurance for firms that hire workers who have been unemployed for more than three months, which he says will create up to 350,000 new jobs, various tax breaks for small businesses, a £50bn national loan guarantee scheme that would use government money to underwrite bank loans to businesses and more investment in green industries.
Liberal Democrats
Nick Clegg believes the Lib Dem proposal for income tax to be cut by the equivalent of 4p in the pound would help millions of families who are struggling with the recession. In addition, the Lib Dems have also focused on two specific areas where the recession is causing problems: they want to force energy companies to cut fuel bills and change their pricing strategies so that poor customers pay less; and, to cut the number of house repossessions, they want banks to do more to help customers who cannot pay their mortgages.
- Economic policy
- Tax and spending
- David Cameron
- Gordon Brown
- Nick Clegg
- Credit crunch
- Recession
- Banks and building societies
- Banking
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