VAT to be cut to 15 percent

It looks like Brown will cut VAT from 17.5% to 15% - the lowest the EU will allow. This would be the crux of Monday’s recession budget. The move costs £12.5bn and the idea would be to get retail sales moving, then jack up VAT later. The threat of the increase, of course, being the point of the stimulatory push. And put VAT back up to what? Robert Peston has speculated a 22.5% level. Crucially, it also seems the deficit will be £120 billion a year by 2010-11. The other bits and pieces include £5bn projected efficiency savings (but...

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Daily Brief

Even before receiving a frosty reception on Capitol Hill this week when they asked Congress for $25 billion in government aid, Detroit executives expressed a willingness to give up some of their sacred cows (if not yet their private jets).

General Motors, for instance, said it would not advertise on the Super Bowl in February -- a major concession, considering that it's been one of the three biggest advertisers on the N.F.L. championship game over the last two decades years.

What if that's not enough in these trying times? What if G.M --...

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Who will take over Citi?

As John Carney notes today, Citigroup's market capitalization is $21 billion; that of Goldman Sachs is $20 billion. Can anyone say "merger of equals"? Nothing's unthinkable in this market, not even the idea that you can tie two rocks together and hope that they float. Reportedly Lloyd Blankfein approached Vikram Pandit with a merger proposal in September, and was rebuffed; now, however, the matter is out of Pandit's hands, and Citi's board might be more amenable to such a suggestion.

A Citi-Goldman merger would give Citigroup much more credible management, assuming that the Goldman...

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Cleggy calls for exit from the EU!

No, really, Nick Clegg calls this morning for the UK to leave the European Union. No, I'm not making this up either. It's really rather an odd thing for the europhile leader of a near federast party to argue for but there it is.

That means taxing capital gains as income, harmonising pension tax relief and stopping big companies from taking operations offshore to avoid tax.

It's that companies going offshore thing which is the problem. The EU guarantees, insists upon, the free movement of goods, labour and capital. Its also made very clear in court rulings that the...

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