It’s not a great time to be a banker at the moment with financial apocalypse making the pin-striped gents probably more loathed than estate agents or journalists. Thousands of them have lost their jobs and those that are still in paid employment are finding that their renumeration packages are coming under ever greater public scrutiny.

Over the weekend reports that the Royal Bank of Scotland was about to award its staff a billion pounds in bonuses prompted outrage at a time of soaring unemployment and with a deep recession looming. Most people would agree it is a no-brainer that a company that has just posted the biggest-ever financial loss in British corporate history, required a 20-billion-pound government bail-out to stay afloat last year and is now nearly 70-percent state-owned should not be allowing its staff to be trousering huge bonuses.

The banks say they are bound by contract to pay the bonuses and that they need to retain key staff.

But that argument has got the former deputy prime minister John Prescott so riled he has even launched a public campaign against the bonus payments on Facebook. “This is morally and economically outrageous,” wrote Prescott. “If we hadn’t bailed them out to save homeowners and businesses, their contracts would be worth nothing as they’d be out of work.”

Over in America U.S. President Barack Obama has set a $500,000 annual cap on executive pay and imposed other restrictions on companies that receive government aid. Chancellor Alistair Darling has said it is too early to follow Obama’s lead, despite the European Commission urging states to cap bank pay.

Is it time for banks that are receiving government help to be subjected to a salary cap or would that policy be counterproductive to economic revival?

One thing looks to be sure this year - the housing market has further to fall. Some of the gloomiest predictions are for a further 20 percent slump before a recovery may set in.

Our own Reuters poll of 37 analysts at UK banks, published today, predicts that prices are likely to drop by about 11 percent this year and that it will take until 2010 before it gets better.

How much do you think house prices will fall in 2009?

It’s widely acknowledged to be bad for your health but millions do it, even without getting paid for it. The Trades Union Congress (TUC) said on Thursday the number of people working hours they are not paid for is at its highest level since 1992.

Five million worked unpaid overtime last year because of a “long-hours” culture and concern that the economic downturn is putting their jobs at risk. The largest increase in workers carrying out unpaid overtime occurred in London, followed by the east Midlands and eastern England.

Have you been asked to work extra hours, and how is it affecting your work/life balance?

A small but growing number of companies are considering asking their workers to take a pay cut as a means of cutting costs without having to fire anyone.

In the latest example, three unions representing steelworkers at Corus have offered to take a 10 percent cut across the company’s entire UK workforce of 25,000 for six months in an attempt to save one of the last remaining steel factories in Britain — the plant at Llanwern in Newport, South Wales.

The steelmaking part of Llanwern was shut in 2001 with 1,300 redundancies but the site still makes steel sheets and employs more than 1,000 people.

India’s Tata Group, which bought the Anglo-Dutch company last year, has said it wants to cut costs by 350 million pounds in both the UK and the Netherlands as it cuts production by 30 percent.

Other possible solutions include cutting employees’ working hours. Corus in the Netherlands, for example, is asking 6,400 workers to each work one day less perweek for six weeks — the equivalent of cutting 1,100 full-time jobs.

In another example, engineering firm JCB has managed to limit job losses after the GMB union agreed to accept a shorter and lower-paid working week

As the downturn bites and announcements of  huge job losses become a daily event, do you think such solutions are the answer. Would you take a pay cut? Or is there an element here of employers using the dire economic situation to extract unfair concessions from their workforces?

The Bank of England has cut interest rates by a whole point to 2 percent in response to increasing worries over discouraging data and a looming recession.

This week, the all-important services sector (which makes up three quarters of economic output) recorded its weakest headline index since 1996 and seventh straight month of contraction. Together with dismal news on unemployment and inflation, these surveys confirm that recession is spiralling as we reach the close of 2008.

So was the rate cut enough?

The consensus among economists polled by Reuters was indeed for a full point drop, bringing the base rate to the lowest in more than half a century after the big 1-1/2 point cut last month.

But several economists had pushed for a 1-1/2 point cut and some even thought the economic situation is dire enough to warrant zero percent.

Do you think the Bank should have been bolder?

(Please note this is an updated version of an earlier Have Your Say which asked readers how big a rate cut they thought the Bank of England should make. The announcement was made at mid-day GMT)

A report published today by Verdict Research predicts a surge in discount grocers in Britain.  Verdict Research says discounters like privately owned German groups Aldi and Lidl should raise as much finance as possible to aggressively expand in markets where they are under-represented.

This could be good news for the thrifty, middle class shopper - no more need to venture outside one’s turf to areas one would not normally set foot into but which have become a weekly destination because they have a Lidl or Aldi.

There are signs that no-frills discount stores are being embraced by all socio-economic groups in Britain. Surveys by consumer group Which? show that Aldi and Lidl score higher than Sainsbury’s, Tesco, Asda and Morrisons.

But mainstream stores are trying to claw back customers - Tesco’s and Sainsbury’s announced they’re going to implement a cut in VAT three days early on a range of goods, and Marks & Spencer is planning a repeat of last week’s flash sales.

What will you do?  Stick to your tried and trusted High Street stores or cut your losses and shop where it’s cheapest?

Here is a guide on what the pre-budget report means for personal taxation by accountancy firm BDO Stoy Hayward.

Income tax - changes to allowances and rates

The basic personal allowance for 2008/09 was increased above inflation from £5,225 to £6,035 as a one off measure to compensate for the loss of the 10 per cent starting tax rate.

For 2009/10 the personal allowance will be increased by £130 above inflation from £6,035 to £6,475. All other allowances, the income limit for age-allowances, the minimum amount of married couple’s allowance and the starting rate limit for savings will be increased in line with inflation.

For 2010/11, the basic personal allowance will be reduced in two stages as follows:

• where an individual’s gross income exceeds £100,000, the allowance will be reduced by £1 for every £2 of income above the limit up to a maximum of 50 per cent of the basic allowance
• where gross income exceeds a second limit of £140,000 the allowance will be  further reduced by £1 for every £2 of income above the limit up to a maximum of the full personal allowance.

There are no changes in respect of the basic and higher rates of tax for 2009/10 and 2010/11. These will remain at 20 per cent and 40 per cent respectively. The basic rate band limit will however be increased by £800 above inflation to £37,400 for 2009/10.

For 2011/12, a new 45 per cent rate will apply to taxable non-savings and savings income above £150,000. As a consequence of this change, a new rate of 37.5 per cent will apply to taxable dividend income above £150,000 thus introducing a third tax rate to be applied to dividends.

These changes will also apply to trusts where the trust rate and dividend trust rate will increase to 45 per cent and 37.5 per cent respectively from 6 April 2011.

How this affects you

By 2011/12, the Income Tax position for those earning less than £100,000 or more than £150,000 will be simple. Those earning less than £100,000 will have a full personal allowances and a top rate of 40 per cent. Those earning more than £150,000 will have no personal allowance and a top rate of 45 per cent. For those earning between these amounts the position will be complicated – the top rate of tax will be 40 per cent but the amount of personal allowance will vary.

Pension schemes

The maximum annual contribution limit will be frozen at £255,000 from 2010/11 to 2015/16.

The lifetime allowance will also be frozen at £1.8m from 2011/12 to 2015/16.

How this affects you

Taxpayers are advised to look at some planning. With careful planning, tax relievable contributions of up to £510,000 or more can be made in a single tax year. Therefore, higher earners may want to defer pension contributions until the higher rates apply after 5 April 2011.

Extension to list of qualifying ISA investments

Under existing ISA regulations, only securities issued by a UK or European Government or by a company which has a share capital can qualify as investments for a stocks and shares ISA.

From 16 December 2008 bonds issues by Multilateral Institutions can also qualify.

Multilateral Institutions are inter-government organisations usually involved in global development work – for example, UNICEF, World Health Organisation, African Development Fund.  Many such institutions issue bonds as part of their funding arrangements and extending the ISA regulations to include such bonds is part of the Government’s international poverty reduction agenda.

A full round-up of BDO Stoy Hayward’s pre-budget analysis can be found here

Newspapers were in no doubt of the significance of the pre-budget report – this was a defining moment in British politics.

New Labour is no more, they announced, and prudence has been blown away by a massive gamble for the hearts and minds of the electorate before the next election.

“The landmark mini-Budget was a pivotal moment which will shape British politics for years ahead,” wrote The Independent. “It presents voters with a stark choice between two very different futures: a European-style social democracy under Labour, in which the better-off pay higher taxes to maintain public services, or a nation of lower taxes and state spending under the Tories.”

The Guardian, in an editorial entitled “Everything Changes,” said Chancellor Alistair Darling had read the last rites for New Labour. “He abandoned, through necessity, the deal Tony Blair and Gordon Brown struck with the electorate a decade ago, that progressive politics could be paid for without overt economic pain.”

“The government,” it said “has found a purpose, which is to tax the rich to help the poor, something it has never dared admit openly before. Old political certainties now lie like timber, uprooted in the storm. An extraordinary history-changing contest has been got underway.”

The Times called it a “Robin Hood style budget” and echoed the theme of Labour returning to its left-wing roots. “When faced with difficult choices in a serious crisis, it has abandoned its new dogmas for old certainties,” the paper wrote. “Opposing the ‘fiscal stimulus’ is perhaps David Cameron’s biggest gamble, given that Britain’s action will be followed by other countries over the next days and weeks.”

Both parties have now hitched their fortunes to the length and depth of the recession, it noted.

The Sun was among the many papers proclaiming the death of New Labour. “In one emergency splurge, a beaming Mr Brown reverted to Old Labour’s natural big government tendency to tax spend and borrow,” it said.

If the gamble fails, Brown will have mortgaged Britain’s future in “an unforgivably reckless budget.”

The Daily Mail called the pre-budget report the most dramatic about-turn in government policy since the 1970s. “Even if the incentives work  -  and there have to be doubts about whether the cut in VAT will trigger spending in our ailing High Streets  -  the truth is that it represents the most monumental gamble by the Chancellor. For it is based on a positively rose-tinted prediction that the economy will start bouncing back by 2010  -  something many experts hugely doubt.”

The Daily Mirror portrayed Brown on its front page as a poker player, holding his cards under the headline “The Gambler.”

“Mr Darling is taking a big chance but the Tories’ do-nothing approach is a non-starter,” it said. “Yesterday was a big moment in post-war politics and the government rose to the challenge.”

Whether the 20 billion pound package of tax cuts and spending stimuli will be enough to see Britain through the next few painful years was a topic of wide debate in the papers but most felt the VAT reduction to 15 from 17.5 percent — a cornerstone of the report — would have little effect.

“The tragedy is that the fiscal stumulus package, led by a small reduction in value added tax, will still fall far short of the desired effect,” wrote the Financial Times. “The UK consumer is now too stunned by the housing crash, stagnant wages and fears of unemployment to be coaxed into resuming the insane credit-fuelled binge of yesteryear.”

Chancellor Alistair Darling has delivered a 20 billion pound fiscal stimulus package to get the nation spending again and mitigate the worst effects of the downturn.

He cut VAT to 15 from 17.5 percent just in time for Christmas shopping – a move he said would put some 12.5 billion pounds in consumers’ pockets over 13 months. Other measures include well-leaked plans to help homeowners, small businesses, parents and pensioners.

But government borrowing will more than double to 78 billion pounds this year and 118 billion next year before starting to come down. Darling says he will bring the public finances back into balance by 2015.

The package now sets in stone the diverging approaches towards the downturn being adopted by the main two parties. Labour is effectively spending its way out of recession, the Conservatives — against the run of most independent economic advice — have opted for caution. Shadow Chancellor George Osborne said the plans amounted to “putting a time bomb,” set to explode in the future, under the nation’s finances.

What do you think? Is this a bold and innovative way to get the economy moving again or a dangerous, debt-fuelled gamble?

Prime Minister Gordon Brown has suggested he will push expansionary fiscal policies to help boost the economy. Brown’s comments were the latest in a series from him and Chancellor Alistair Darling stressing the importance of boosting the economy, which shrank in the third quarter of 2008 for the first time in 16 years and is expected to contract more sharply next year.

Bank of England Governor Mervyn King has also put his weight behind “some fiscal stimulus”, just as the Bank predicted in its quarterly inflation report that the economy would shrink sharply next year.

But what is the way forward - tax cuts or higher public spending?

The dividing line between Brown and Tory leader David Cameron is whether to borrow to fund tax cuts. Cameron has argued that Britain’s deficit is too high to allow further borrowing. Brown says Cameron’s claim that he can pay for his tax cut by savings on welfare benefits isn’t realistic.

Tax cutting is a populist measure and it may be tempting for Brown, who no longer appears to be married to fiscal prudence, to go down that road, not least because of the backlash he faced earlier this year over scrapping the 10 percent tax band.

But there are a number of reasons why tax cutting may not result in a boost to the economy: government borrowing gets dangerously high and will limit the economy’s ability to recover swiftly from a recession, and people may decide to save rather than spend any extra money they might have in their pocket due to tax cuts.

What’s your view - do you think increased public spending will stoke demand, are tax cuts the way forward to boost the economy or should the government go for a mix of both?