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May 1st, 2008

Dear Chancellor… What would be in your letter to Darling?

Posted by: Jennifer Hill

darling.jpgLabour might appear to have calmed the storm over the scrapping of the 10 percent income tax rate for now. But new research shows the extent to which Britons are peeved about the level of income tax.

When asked what would be their key requests of Chancellor Alistair Darling, the largest proportion of more than 3,000 people polled for Unbiased.co.uk — 31 percent — said they’d like to see a cut in income tax. And, it seems, many Britons feel an obligation to help the less well-heeled: while 12 percent would like to see it reduced for everyone, 19 percent want a cut for less affluent sections of society.

The issue was, perhaps unsurprisingly, found to be the most pressing for younger generations — those with long working lives and greater earning potential ahead of them. Around 44 percent of 18 to 24-year-olds surveyed want a cut, compared to 19 percent of 55 to 64-year-olds and 13 percent of those aged 65 to 74.

But the requests do not stop there: almost a quarter would ask the Chancellor to provide a better level of state pension, 6 percent want increased pay for public sector workers, 5 percent increased support for carers, the same percentage an increase in the inheritance tax threshold to 750,000 pounds (from a current 312,000 pounds), and 2 percent want the stamp duty thresholds to be reviewed.

Others would implore the Chancellor to reconsider public spending: 5 percent want funding for the third generation of nuclear deterrent to be scrapped, 4 percent call for a four billion pound cap on the Olympic budget; and the same proportion want more spending on environmental issues.

It’s easy to see why: soaring house prices have pushed more people into the inheritance tax net and sent stamp duty bills soaring, “fiscal drag” — whereby thresholds fail to rise in line with inflation — is pulling people into new and higher tax brackets, and interest in “green” issues is on an upward trend.

But don’t forget that there are simple things we can all do to keep the taxman’s hands off our cash. The nation is wasting a whopping 9.3 billion pounds in unnecessary tax payments — from the likes of people not making use of their individual savings account allowance (a total 7,200 pounds this year, of which 3,600 pounds can be stashed in cash), wasting tax credits and not taking steps to reduce their taxable estate for inheritance tax purposes.

April 28th, 2008

Gordon Brown needs a diversion

Posted by: Sumeet Desai

Pressure is growing on Gordon Brown to reshuffle his Cabinet after Thursday’s local elections to take some of the sting out of the drubbing his Labour Party is expected to get at the ballot box this week.

Press reports last week suggested Health Secretary Alan Johnson might be in for a promotion. But government sources show no sign that Brown is about to rearrange the decks just yet.

For a start, it’s not really clear a reshuffle now would sort out the government’s problems. Many of the current Cabinet have such little profile that changing their jobs would hardly excite the public imagination.

Also, the big jobs that might cause a stir are really locked down. Brown isn’t about to remove close ally Alistair Darling from the Treasury — it’d be tantamount to admitting the government bore some of the blame for the economy slowing down. The preferred line is to blame the global credit crunch.

Nor does David Miliband look as if he is going anywhere from the Foreign Office. It wouldn’t make political sense to give the young minister often talked about as a future leader of the Labour Party cause for grievance just when the prime minister’s authority is really under scrutiny.

But Brown still really does need what he calls a “diversion” from all the negative press he’s been getting. His popularity has slumped, the economy is slowing down as house prices fall and his backbenchers are no longer afraid of challenging him on the policy front.

So far his answer has been to say people will back him when they see he’s been taking the right long-term decisions. The economy, he says, will be his main focus.

The problem with that is this is exactly how people remembered him when he was Chancellor of the Exchequer for 10 years. As prime minister, he needs to connect better with voters who are looking for a reason to vote Labour again when the party has already been in office for more than a decade.

Brown doesn’t need to change his Cabinet now, he needs to change the way he communicates.

April 22nd, 2008

Tuesday’s headlines

Posted by: Avril Ormsby

mail-pic.jpgHere is a round-up of Tuesday’s headlines:

DAILY MAIL: Father of Four Taken to Court and Fined…Because he Overfilled his Wheelie-Bin by Just Four Inches

Bus driver Gareth Corkhill collected a conviction and a 210 pound fine after he declined to pay a council on-the-spot fine for leaving the lid of his wheelie bin ajar four inches. Story here.

THE TIMES: Judges Set to Deliver Fresh Blow on Terror

Gordon Brown was facing a new battle over key anti-terrorism laws this week with the High Court set to rule against powers to freeze suspects’ bank accounts, the paper said. Story here.

The Sun: Harry Meets His Hero

Prince Harry, who served in Afghanistan, is pictured smiling and relaxing with wounded soldiers recovering in the Forces rehab centre in Surrey. Story here.

The Independent: Can the Bank’s 50bn Pounds Save the Economy?

The newspaper’s Hamish McRae explains in a typical Independent comment-style front page that the Treasury and Bank of England’s line of credit may not be enough to keep the supply of mortgages flowing. Story here.

Daily Express: Miracle Surgery Lets the Blind See

The paper looks at how British doctors carried out pioneering surgery to restore the eyesight of two blind patients. Story here.

The Guardian: You’re Dragging Us to the Edge, Labour Rebels Warned

Gordon Brown moved to stop a potentially damaging backbench budget rebellion with a contrite address to Labour MPs and a promise to hold a review before the autumn on the impact of the abolition of the 10p tax rate. Story here.

The Financial Times: King Rules Out Return to Risky Mortgages

The paper quoted Bank of England governor Mervyn King insisting that the housing market will not see a return to the profligate mortgage lending practices of the past few years while he announced a massive operation to support liquidity in British banks. Story here.

Daily Mirror: Show Some Heart

Chancellor Alistair Darling was going to tell bank chiefs to go easy on families who fall behind with their mortgages, the paper said. Story here.

April 21st, 2008

Should the 10p tax rate have been scrapped?

Posted by: Stephen Addison

darling1.jpgA possible Commons rebellion by Labour MPs next Monday over the scrapping of the 10p starting tax rate has been averted but the episode has further damaged the standing of Gordon Brown.

In 2007, in his last budget as Chancellor, Brown abolished the 10p rate as he reduced the standard income tax rate to 20 from 22p and reformed National Insurance thresholds. Many backbench government MPs felt that hitting some of the poorest sections of the working population in such a way was an affront to their basic Labour principles.

Chancellor Alistair Darling at first rejected demands to compensate those worst hit, like the under-25s who earn less than 18,000 pounds or those who work fewer than 16 hours a week and who therefore do not qualify for tax credits. “I cannot re-wind the budget,” he points out.

But with local elections coming up on May 1, the need to head off rebellion was urgent.

Do you believe abolition of the 10p rate should ever have been considered by a Labour government?