With the pre-Budget report due on the 24th of November, there are rumours of tax cutting measures to help stimulate the consumer economy.

Anything that puts more disposable income in the pockets of consumers — that's you, me and everyone else — can only be a good thing for anyone selling to the public. Now that we're officially in a downturn, one way out is to trade our way out of difficulties. Merchants and distributors are no different to anyone else, they need the trade and should benefit from any general rise in spending.

There is a view that the banks, having helped get us into the mess have been 'rewarded' by their bale-out packages. Interest rate cuts, whilst broadly welcomed, are taking time to filter through to the rest of us in the form of lower mortgage payments (if at all in the case of some lenders). The general public could be forgiven for thinking 'what about us?'. People want something tangible, that affects them directly in their pockets.

An increase in personal tax allowances has been suggested. Another possibility is a National Insurance payments holiday for new workers, to encourage employers to take on staff.

Most interestingly would be a cut, permanent or otherwise, in VAT rates. A 5% cut to 12.5% has been suggested.

Asked about rumours that VAT may be cut Prime Minister Gordon Brown said: "We're looking at everything we can to see how we can help people and we will make announcements very soon about what we are going to do."

More: http://news.bbc.co.uk/1/hi/uk_politics/7719017.stm