We need those tax cuts, Mervyn!

“The governor of the Bank of England, Mervyn King, does not try to be interesting. He just can’t help it,” proclaimed Evan Davis on this morning’s Today programme, after King spoke out over rumours the government plans to introduce further tax cuts during next month’s G20 summit.

Davis made this morning’s rather dubious assertion after King’s warning against a further fiscal stimulus package yesterday, saying the UK “is not in the position where we could say: ‘Well, why don’t we just engage in another significant round of financial expansion’.”

The comment represents a ‘highly unusual intervention’ from the governor, said the Telegraph. Until now, King has avoided talking about the Treasury’s tax plans – but after speculation that the Prime Minister plans to announce ‘another multi-billion pound fiscal stimulus package’, he warned it would be ‘sensible to be cautious’.

Most experts agree if it is announced, the stimulus will deliver some relief to pensioners, but where else could it go? Businesses are still struggling, so Smarta has decided to help the Prime Minister by rounding up some areas which could do with a bit of relief. Think of it as a sort of crib sheet of the needy for Mr Brown to peruse at his pleasure – despite Mr King’s reservations.

1. Property

With global property sales down by 60%, house prices set to fall by 30%, and thousands of new build apartments standing empty, the property market is badly in need of a boost from government. Could a cut on empty property tax be part of Brown’s plans?

2. Retail

High streets across the country are suffering and could do with a break: latest figures show sales were down 1.8% in February, while Scotland suffered the worst sales decline in eight years. New laws to make rent payable monthly rather than quarterly would help to ease cashflow, while a reduction of regulation on retailers would help to nurture high street spending.

3.Car manufacturing

While Peter Mandelson agreed a £27m deal to help Jaguar-Land Rover, the car manufacturing industry is still in a bad state. Figures out last weekend revealed car manufacturing had slumped by almost 60% last month, and while most factories have made significant job cuts or implemented a four-day week, the industry is still on the verge of collapse. “It is not a question of propping up lame ducks, but ensuring we have a solid manufacturing base for a successful future,” warned David Frost, chairman of the British Chambers of Commerce (BCC) in January.

4.Pick’n’mix

After the untimely demise of Woolworths, the pick’n’mix industry has been plunged into turmoil, leaving confectioners everywhere in a sticky situation. “We don’t know what to do with our stock now they’ve gone,” sobbed one sweetie manufacturer last week*.

“We’ve got literally hundreds and hundreds and hundreds of thousands in our warehouse and nothing to put them on. We've had to fight off a plague of sugar mice and we’ve got liquorice laces hanging from the rafters.

“We miss Woolworths,” he moaned. “We never thought we’d have to survive without them.”

*may not be an entirely accurate quotation

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