MPs warn tax rises likely to follow tax cuts

Treasury officials are reportedly still working out how to present the fiscal stimulus package in Chancellor Alistair Darling's pre-budget report on Monday - and show there is a plan to pay for them in three or four years time.

Lord Mandelson, the new Business Secretary, said yesterday 'a medium term adjustment some years ahead' would be necessary to pay for the fiscal stimulus package, widely tipped to include a tax giveaway to revive Britain's ailing economy.

Darling has stressed his autumn statement has to be responsible and not simply announce a series of tax cuts without explaining how they will be funded after Britain comes out of the recession, The Daily Telegraph notes.

Gordon Brown, newly returned from the G20 summit, paved the way for next week's tax cuts in the House of Commons, saying 'unless you take the fiscal action that is necessary now, and help businesses and families now, you are undoing any benefit that can come from monetary policy and cuts in interest rates'.

Further reading:

Cameron proposes tax cuts for employers

Osborne's unveils anti-recession plans

Read The Daily Telegraph story