UK economy

Company wins £150m govt contract despite tax avoidance

May 13, 2013 4:09 pm by Kiran Stacey

Earlier this year, Danny Alexander told the FT he was going to use the levers of government to get companies to pay their fair share of tax. Specifically, he was going to stop companies from winning big Whitehall contracts if they haven’t complied with tax rules. He told us at the time:

If you work for the government, whether you’re an individual employee or a company that has got a contract with the government, you need to be behaving properly with regard to tax rules.

His comments came after an FT investigation showed some of the world’s biggest IT companies that provide services to the government, use ingenious and somewhat aggressive tactics to avoid paying UK corporation tax. Read more

Tags: Arqiva, Danny Alexander
Posted in Tax, Treasury, UK economy, UK politics | Permalink

Health chief suggests NHS may have to charge patients

April 15, 2013 4:42 pm by Financial Times

By Sarah Neville

Comments to the FT from one of the most important figures in the NHS this morning ask the most fundamental question that can be asked about the NHS: in an era of austerity can a universal free health service survive?

Malcolm Grant, chairman of NHS England, told us that he thinks a future government will have to consider more widespread user charges in the health service unless the economy picks up.

Grant made clear that he would not support any departure from the defining principle of a free-at-the-point-of-use NHS. But that doesn’t matter – these are macro-economic decisions for government that fall beyond his remit. Read more

Tags: Malcolm Grant, NHS
Posted in UK economy, UK politics | Permalink

The English want benefit cuts, the Scottish less so

April 4, 2013 4:37 pm by Kiran Stacey

I was interested to read the piece by Alex Massie in this morning’s Scotsman, in which he argued:

Scots may take an even tougher line on welfare than voters elsewhere in the UK… Visit any working-class pub in Scotland and you will hear opinions that make IDS seem like Polly Toynbee.

If this is true, it makes the SNP position problematic. The party has consistently opposed the coalition’s welfare cuts, and when Johann Lamont, Labour’s Scottish leader, suggested axing certain universal benefits, such as free prescriptions, the SNP called it her “speech of madness”.

So what does the polling suggest? A fairly comprehensive look shows us two things: 1) Scottish voters are less hostile to the welfare system than elsewhere in the UK; but 2) they remain in favour of benefit cuts. Read more

Tags: Alex Salmond, snp, Welfare
Posted in Conservatives, Treasury, UK economy | Permalink

Danny Alexander seat protected by Treasury giveaways (Updated)

April 3, 2013 5:31 pm by Kiran Stacey

Talking to a senior Liberal Democrat the other day, talk turned to which of their MPs are at risk at the next election. This person reckoned the party could feasibly hold on to between 43 and 50 seats, which would be a major triumph given the meltdown many have been predicting for the last few months.

One seat this person insisted was safe was that of Danny Alexander. Why, I asked – because Inverness voters like having a political heavyweight (before you criticise, he is a member of the quad) as their MP? To a certain extent, they replied. Because the voters there are died-in-the-wool Lib Dems? Not especially, they said. Why then? Because Inverness has done very well out of Danny Alexander.

On several occasions since Alexander became Treasury chief secretary, there have been small but significant giveaways that help, among other places, Inverness in particular. Read more

Tags: Danny Alexander
Posted in Lib Dems, Tax, UK economy, UK politics | Permalink

Mandelson’s attack on Labour’s economic policy in full

March 22, 2013 1:16 pm by Kiran Stacey

Amid the genteel surroundings of the Park Lane Hotel ballroom last night at the CBI’s annual black-tie dinner, Lord Mandelson was at his waspish best.

His keynote speech was ostensibly about Britain’s role in Europe, but he couldn’t resist throwing in a few barbed remarks about his Labour colleagues, both past and present. Departing from his pre-prepared script, the former business secretary had this to say about Gordon Brown, the man he served so closely in the dying days of the Labour government:

I can’t remember which who the member of the government was who claimed we abolished boom and bust. Well, we abolished boom…

Tags: Ed Balls, peter mandelson
Posted in Ed Miliband, Labour, UK economy, UK politics | Permalink

EXC: MoD heading for further massive cuts

March 21, 2013 3:48 pm by Kiran Stacey

Last month, we mapped out what each department could expect to face in the June spending review given the Treasury’s promise to keep cutting at the same pace as it has done before.

That study showed some of the most sensitive departments were in line for the steepest cuts. Local government was in line for £1.3bn of cuts, the business department, just over £1bn, and most sensitively of all, defence, nearly £700m.

Those calculations, however, only got us up to just over £7bn of cuts. We decided to take a cautious view, sticking to the idea of spending falling at the same trajectory as it has been so far, rather than striving to hit the £10bn figure. Read more

Tags: Spending review
Posted in Coalition, Treasury, UK economy, UK politics | Permalink

Budget 2013: FT readers’ reactions from Twitter and Facebook

March 20, 2013 6:37 pm by Financial Times

What was your response to the Budget? We asked readers on social media what the most important decisions were for them.

For Peter Curnow-Ford it was the stamp duty cut: Read more

Tags: Budget, George Osborne
Posted in UK economy | Permalink

The downsides of the childcare voucher scheme

March 19, 2013 10:30 am by Elizabeth Rigby

David Cameron and Nick Clegg were this morning falling over themselves to claim the credit for helping “hard working families” with news of a new voucher scheme that could be worth up to £1,200 per child.

After weeks of wrangling, the coalition was finally ready to press the button on a tax-free childcare scheme to replace the current “employer supported childcare” system. The new scheme will eventually reach up to 2.5m families – compared with the 450,000 who access the current voucher system – and include the self-employed. Read more

Tags: Childcare
Posted in Coalition, David Cameron, Nick Clegg, Tax, Treasury, UK economy | Permalink

Just how unpopular is George Osborne?

March 14, 2013 4:27 pm by Kiran Stacey

Some fascinating economic research by Ipsos Mori, published today, shows that George Osborne is the least popular chancellor in nearly a decade, with net approval ratings of -33. Nobody has had such bad ratings since Ken Clarke in the early 1990s.

At first sign this is unsurprising: this is the first recession we’ve had since the early 1990s (if you take 2008-now as one recession). But actually when you plot the popularity of chancellor’s against economic growth, the two are surprisingly unconnected.

Plotting chancellors’ approval ratings since 1976 tells us a few things: Read more

Tags: George Osborne, ipsos mori
Posted in Conservatives, Recession, UK economy, UK politics | Permalink

Stopping benefit tourism: what can be done? UPDATED

March 5, 2013 11:33 am by Kiran Stacey

I’ve updated this post at the bottom in light of this afternoon’s parliamentary debate on the issue.

As the Tories contemplate the fallout from coming third in the Eastleigh byelection, different ministers have been floating different ideas for recapturing the votes lost to Ukip. One such idea is banning newly-arrived migrants from accessing certain benefits and NHS services.

Polls suggest immigration is a major reason for voters choosing Ukip, and Conservatives worry that trend will only accelerate when limits on movement from Bulgaria and Romania to elsewhere in the EU are removed.

A cabinet sub-committee has been convened to look into the policy options, but in the face of EU rules forbidding discrimination between citizens of different European countries, is there anything they can do, or is this empty populist rhetoric? Read more

Tags: Benefit tourism, Benefits
Posted in Conservatives, David Cameron, Ed Miliband, Europe, UK economy, UK politics | Permalink

Cameron reopens welfare spending row

February 19, 2013 3:17 pm by Kiran Stacey

George Osborne and Danny Alexander

This June, George Osborne will unveil his spending review for the financial year 2015/16. The chancellor is expecting to have to make around £10bn of cuts to Whitehall departments, which, as we revealed in the FT a few weeks ago, would mean some departments taking a particularly heavy whack.

Our figures show that cutting at the same pace as the government has done so far, which is what Osborne has promised, would mean another £1bn taken out of both the business department and the money that goes to local government. The defence budget, possibly the most sensitive of budgets, at least within the Conservative party, would fall by nearly £770m. Read more

Tags: George Osborne, Spending review
Posted in Deficit, UK economy, UK politics | Permalink

Tory takeover of Lib Dem tax plans

February 18, 2013 1:18 pm by Kiran Stacey

Ed Miliband’s announcement that Labour backs a mansion tax on properties over £2m, with the money used to fund a new 10p rate of income tax, has left the two coalition parties scrambling to trump the opposition with their own progressive tax plans.

For the Lib Dems, this meant leaking a tax document* being prepared in advance of the party’s spring conference. The paper proposed extending the mansion tax from people’s first properties to apply also to additional properties and any other land they may own. It also suggested the more radical idea of taxing assets such as paintings, jewellery and even record and book collections – although this was quickly dismissed by Vince Cable.

The Tories offered their own response on Sunday evening, when Tory chairman Grant Shapps appeared on BBC 5 Live’s Pienaar’s Politics. Shapps told the programme the Tories were considering pushing the income tax allowance beyond the £10,000 level currently planned – something that could go into the party’s 2015 manifesto. Read more