1 trillion = 1000 billion, not 100 billion

chris walter, Maidstone,

this is NOT a tax cut! It's only a cut if the Government lowers public spending. This is a tax deferral. to be paid back, with interest. All Darling has done is take out another credit card...

alec mac grory, glasgow, scotland

Also some businesses will cancel the reduced VAT by putting up their prices or not passing on the reduction in the first place. Some small businesses are already saying it's a waste of time and money to change everything to reflect the VAT reduction. It's only there until next December!

LD, London, UK

it was announced on Monday that Air Passenger Duty (APD) would become a four-tier system based on distance travelled.
Those flying furthest and having the biggest environmental impact will pay more, with travellers going to Australia forking out nearly A$200 in tax

tom, uk,

A simple measure to help small businesses survive and even prosper would be to pay their invoices owed by other companies.
Cash flow is the life blood of small businesses.
Payment in 90 days is the norm but if you don't get it ???
It wouldn't cost much either as it would be just a short term loan.

GJB, SLOUGH, Berkshire

And why penalise high earners
Martyn Taylor, Swindon, England

If our soldiers can go out and risk their lives for £250 per week to keep you safe I dont think it's too much to ask that you help the country out by paying a few pounds more.
Don't be so selfish.

Phill , Cheshire, UK

labour have in that budget guranteed that the recession will be worse than it would have been without this budget. the .5% increase in NI for employers will stop employers taking on more staff. they want to get people back into work but add £100 minimum PA to every new job. what planet are they from

will, grimsby, uk

a 2.5% cut in vat wont really have an effect when companies are cutting prices massively already.
and .5% increase in NI just means £100PA minimum increase to the cost of every employee. this is guranteed to increase layoffs, make the recession worse and stop the unemployeed finding new jobs. crazy

will, grimsby, uk

I think Darling's statement was inspirational. I was one of those who had swung to the Conservatives but no longer. I am backing Labour now! They are trying whilst Cameron sits on his hands and does nothing!

Craig, Glenorthes,

.....hmm, what country shall i move to?

eric, nottingham,

Problem is people have short memories. Every Labour Government has left the country bankrupt c/w years of pain for the Tories to sort the mess. This time it's so bad it's going to take a generation. I feel sorry for my kids. I wouldn't be surprised if the Tories didn't want to win the next election

Phil C, Rugby, England

So now we have NuLab's best estimate of the cost of GB's profligate incompetence over ten years. A trillion and seven years to get back to where we were in 1997. Let's hope this is not an underestimate - hah!

Mike, Huntingdon,

This VAT/duty switcharoo on petrol/diesel means an increase in costs for businesses, VAT is reclaimable, duty is not.

Peter, London,

What a bunch of wasters! If the country was a business it would have gone bankrupt years ago! Please can we have an election NOW so we can kick them out and restore some sort of sanity to politics.

Andrew brown, derby, UK

When you have socialism the government has very few options.Everything is taxed to the max. It can only go after the people/business that still produce something. Eventually they no longer exist

r. burns, St Pete, USA

Does anyone else find it unbelievable this VAT reduction at massive cost gets rushed through without a good debate? I have not heard one expert who believes this will stimulate the economy. The same happened with the abolishment of the 10p rate and the non-doms botched tax attempt.

Mary, London,

There is only one solution to this.
To return confidence we all need to know our jobs are safe
If we do not know this we will not spend
If we do not spend we will all lose our jobs
Answer: - make it illegal to sack anyone for the next 12 months
If our jobs are safe, we spend and we pay taxes

Ian, Liverpool, UK

Welcome back Labour! They were out of power last time for 18 years thanks to their tax and spend addiction. It will take another Maggie to sort this mess out how many years will it take?

Ian Turner, Shenzhen, China

I'm a higher earner and have budgeted carefully to allow for my mortgage payments. With these tax increases, my burden will go up £12k a year. I know no one will feel sorry for me but I will lose my home. This country is heading for disaster by an unelected prime minister.

Mary, London,

I can remember the galloping inflation of the 70's when the pound devalued so very much and public service pay rises were monthly!! We are heading that way again - he's just postponed the date by borrowing and printing more paper money - and when it hits our savings lose their value.

Chris Goodman, Fareham, England

I bet the shops are so pleased at having to reprice everything and change their systems a month before Xmas, and for such a small decrease. They cut prices by ten times this amount regularly.

Andrew of Darford, I think the best way to secure jobs is to spend, businesses need customers.

Alan, Bath, UK

As someone who after working up to 60 hours a week and has been scrimping and saving over the past few years to pay a mortgage have the odd holiday, I have decided when labour say hard working families they actually mean lay abouts who contribute nothing and are living off me,I hate this government

jim, surrey,

Isn't this effectively investment banking, borrow a lot of money now to do a highly leveraged deal to ensure you get a bonus (keep your job) and worry about it later if your assumptions (guess/model) is wrong. After all the shareholders (voters) don't have a say in the matter until its too late!

Richard Harper, Reading, UK

Over £100kpa and tax allowance is halved (to £3k - so you're losing 20% of £3k = £600); over £140kpa and there's no allowance (so you pay £1200); over £150kpa and all that plus another 5% top rate. So someone on 200kpa is paying £1200 in allowance losses and (5% extra tax (2.5k) = £3.7k, not $5k.

paul, Colne,

The 2.5% drop in VAT represents 1/7 of the tax. Yet it is to cost £12.5 billion. So VAT as a whole must bring the Treasury over £84 billion a year - and that's on top of income tax, "national insurance" (aka more income tax), capital gains tax, inheritance tax, customs and excise...

Tom Welsh, Basingstoke,

But scrapping allowances only sees an increase of 20% on the scrapped allowance. i.e. 20% of 3k for £100 - 140kpa and 20% of 6k for 140+. Even with the 5% increase above 150kpa, this doesn't give an extra £5k. All of which seems quite reasonable really.

paul, Colne,

No coincidence that Darling has delayed the 45% rate of income tax until after the next election. No doubt when these incompetents get kicked out they will blame the dire state of the country's finances on the new administration!!

Rog J, Portsmouth, uk

people in this country will away give the eco a boost at Christmas, they will always spend on there love one no matter what the crisis is,

the truth is not many people in this coutry follow politics, so they don't care, they wil do what they always do at Chrismas and spend.

E J essop, Wombwell, Barnsley, England

Ted is right. The changes in VAT will not filter directly into price changes for every taxed item on the shelves. It will create a little more profit for the retailers and maybe their suppliers to counter the shrinking demand. Hopefully this will mean fewer redundancies.

Adrian, Cambridge, UK

I agree with Mark. It's been shown before (Lawsons budget of '88), that cutting the top rate of tax actually increases the total revenue for the treasury.

I'm worried this signals a way back to the old days of the '70s, and that the public are stupid enough to buy it.

Roland Kennedy, Beckenham,

The VAT change is just a diversion, spending is down and will be down for at least a year so this will cost very little in real terms.
As usual nulabour are treating us like idiots, we can all see the tax rises not very well hidden in this PBR.

Perhaps we should start calling them oldlabour now?

bill, Knaresborough,

As long as Labour Govt have Robin Hood chancellor like Alistair Darling Mr Brown will have to go again to Arab countries next year for begging.

Mir Asad Ali, Bristol, UK

The £5,000 extra tax that a person "earning" £200,000pa will pay is in fact about half the INCOME of many Old Age Pensioners after having paid tax and NI all their working lives!

Alan Hargreaves, Holywell, UK

it seems they are digging a bigger hole everyday.when will they learn the uk people want change.give us a election

geoff, bristol, bristol

The average saving for a family earning less than £40,000 is £275 / year , it doesn't even cover a third of your monthly mortgage . This will do nothing , you may aswell go to the pub and start smoking again , giving the money back to the government . Over £40k and your worse off . Utter nonsense.

Nick Dixon, Sutton Coldfield, England

I spy strangers in the Commons - Exterminate - Exterminate.... Dr Who, Cannes.

David Smith, cannes, France

I would laugh if it was not so serious.

Nu Labour dont care about the electorate, they care about being re-elected, just a shame that its the economy thats at stake here. They have been borrowing money since they came to power, this is the result. i feel sorry for my grandchildren

Chris, Leeds, UK

So Labour has used this as an opportunity to increase fuel and alcohol duty... I wonder will the increases in these taxes expire at the same time as the VAT reduction... I think not. Yet another tax rise.

simon, London,

How about a wholesale review of the public sector? For example, the benefits agency manages to "lose" ie unaccount for millions of pounds. In times where the private sector is cutting back on EVERYTHING - the public sector needs trimming down and to be run efficiently. The public sector is a burden

Rose Hedgekiller, Perth, UK

Forget about fixing the roof when the sun was shining, what about fixing the bulging filing cabinet of the Public Sector?

Andy Fleming, Liverpool, UK

How do we stop them doing this?

CK, Reigate,

Petrol, alcohol and cigarette taxes are adjusted upwards next Monday to make sure they are at the same price as now. In January 2010 they are to be increased at the same rate as everything else when the VAT rate returns to 17.5%. That means an increase of 2.5%. Yet another STEALTH TAX

JJ, Lancaster, UK

The whole concept is built on sand, By the end of 2009 we will be looking to increase interest rates to the level of those in Iceland (another bankrupt country)
There will be more pressure on the £ and things will in fact rise in price. It is like watching a disaster movie

V. Cooper, Somerset, UK

At what point will it become clear that a handful of people cannot foot the bill for the masses? We all live in this society, but apparently it is deemed fair for a small minority to pay for the majority. I have no problem contributing more, as long as everyone else does too.

S.C. Huldig, London,

I live in London outskirts with wife n 2 kids on 60K pa. I cannot afford property. After tax NI rent and council tax I am left with £250 pw for everything. I know that we wld be better off if I quit work and went on dole. Yet I am in "rich" bracket to carry Brown's debt burden? It makes me sick.

MyKeL, London,

It's called "scorched earth."

Labour knows it's going to lose the next election. So Brown and co. are going to wreck as much as they can before they go.

Pinkie, London, United Kingdom

Looking for a sustainable solution?
Switch General Elections from maximum every 5 years to a maximum of every 4 years! That would mean an election by June next year.

While we're at it ,local elections every 2 years.

Hugo van Randwyck, London, UK

I can't believe the ridiculous STG85 ($A200) departure tax for Aussie and Kiwis flying home from the UK? Talk about financial desperation from British finance minister Alistair Darling ! What next - a tax on each point scored against England at Twickenham? Or maybe each run at Lords?

Michael Costello, Sydney, AUSTRALIA

I suspect that the prospect of higher taxes imminently will actually have the opposite effect on consumer spending than intended. In addition, we have seen the effect of taxing the very wealthy before - they just choose to reside elsewhere, leaving the middle income families to pick up the bill!

Mark hill, High wycombe, I

I suspect that the prospect of higher taxes imminently will actually have the opposite effect on consumer spending than intended. In addition, we have seen the effect of taxing the very wealthy before - they just choose to reside elsewhere, leaving the middle income families to pick up the bill!

Mark hill, High wycombe, I'm

They should take up to the polls. We can all then have a say if we want them to lead us down this path. This is so typical for a labour government to set the path to economic distruction. Best start reading about the Japanese experience as that is where we are heading - 10 years of misery ahead!

Martin, Winchester,

Woohoo a 2.5% decrease in VAT, I'm gonna spend spend spend! Now if I spend £1000 I'll only have to spend £975-happy times are here again! What a load of rubbish, does anyone think prices will drop as a result? Prices will remain the same and just allow companies to improve their profit margins.

ted, london, uk

These measures are no stimulus. This is a long term tax hike with a soft start. Just what we need to starve investment and make business throw in the towel.

colin, wolverhampton, uk

The future really is bleak, Labour have done it again. I can hardly bare to listen to them: debt debt debt - the Brown Mantra - irresponsible in the extreme & disrespectful to every UK citizen.

Fools as Brown & Darling (& spin dr's like mandelson) should be exiled on a low rock at high tide!

Charlotte, London,

Just to show you have been conned, how much do you spend on fuel. Because the duty on that has gone up and will do so again in april and again next december when the VAT rate is increased again. Fuel affects everyone in this country and Darling 'promised' not to change fuel duty till next April.

rob, ashbourne, uk

Mr Darling is giving retailers who have already printed most of their Christmas advertising and price labels 2.5% more for their pockets in my view. Why should they pass on the VAT change to consumers this close to their busiest trading period? I can't see consumers receiving ANY benefit.

R Simpson, Cambridge, UK

where does this £434 billion come from? overseas Investment? which opens the door to the UK being financially manipulated in the interest of other national aims like never before. GB has sold the UK and knowing his inate talent for buying the top and selling the bottom, he will have given us away..

zugerman, zurich, switzerland

If we wait until next week to go shopping the VAT will be lower so what is the High St doing this week - repricing everything on full pay? High Streets were like ghost towns last week and will be even quieter until Monday. And company sales offices will be banned from typing invoices to until Monday

Sue Doughty, Twyford, UK

Don't be fooled into going out and spending. Ths recession is not going to end any time soon. You're better off using this as an opportunity to clear your debts and prepare for a long global depression. Prepare to feed your famiy when the shelves are empty.

KS, Glasgow, Scotland

Back to the failed Labour policies of the 70's? I wonder how many of those 800,000 people who are paying the bulk of this tax increase will decide enough's enough and move abroad??

It was a disaster in the 70's & will be no different in 2010. Perhaps Darling should read "Atlas Shrugged"...

r wren, London, UK

why do the hard working need to subsidise the lazy?

tom, London, UK

No tax cut, is going to make me go out and spend any more money and i think the same will apply to majority of people out there in the uk.

The only thing that will get us spending is job security adn until that arrives then my money is staying safe,

Andrew, Dartford,

If this Government really wanted to increase consumer spending they should have announced a masive INCREASE in VAT to 30% commencing, say, 1st January 2009.

That would have led to the biggest Christmas spend ever.

The 2 1/2% reduction will stimulate nothing.

Stephen R Jones, Penarth, Wales, UK

Does anyone suddenly feel like going out and spending? Most people realise that todays giveaways are tomorrows taxes.

Until confidence returns and people feel their jobs are secure most will be looking to save.

John Goode, Welwyn Garden City, UK

GB says national debt is at 43.4%GDP, at £645 bn but if you include private finance debt, unfunded public pensions, bank bailout packages this rises to 157%GDP or £2,366 bn . Quote from EH Amory Daily Mail.
Will this ever be paid back? AD and GB probably don't care. They will have died of old age.

Grey, Auckland, NZ

yet more new labour smoke & mirrors 2.5% off vat and still no one spends = no tax cut but increased duty on fuel beer & fags = another tax rise you couldnt make it up!

david, devon,

Now that the Government has bet the farm at the casino in a reckless gamble, will the three Cabinet Ministers- The PM, The Chancellor and the Pay Master General- put their money where the mouth is & promise that if the economy does not begin its recovery by late 2009, they would quit public life.

S Yogarajah, Harrow, UK

Hmmmm.....

From what I've seen and read, the only winners from this are nulabour.

Joe public, loses as much as he gains, and will lose out further later on.

And why penalise high earners, who've worked hard to be high earners?

then again, nulabour celebrate mediocrity, don't they?

Martyn Taylor, Swindon, England

Most of this is just postponing planned taxes increases. How will that put more money to spend in our pockets? People are struggling to pay basic bills, so how will a 2.5% VAT saving on luxuries help anyone? The usual con... take 2p away here and add it there. Heaven help us when it's payback time!

Anton, Fleet,