Expect several front page headlines on Tuesday morning about HMRC’s plunging tax receipts in 08/09 – laid bare thanks to an NAO report. Astute readers of this column will already know about the £20bn-plus fall in tax take – you read it here - because it was flagged up on Budget day in the red book small print. You’ll notice that the coming year is set to be even worse, according to the Treasury’s own predictions.
The real nasty today was another £10bn-plus of unpleasant news, including £3bn of uncollected tax and £7bn set aside for legal claims by taxpayers. The bulk of the latter – a staggering £4.8bn – stems from a single landmark case concluded early last year over VAT repayments. HMRC admitted today that they have already paid £1.5bn as a result of this “Fleming” test case. That’s an awful lot of helicopters or MRI machines.
Read here for the full story about Sir Alan Sugar’s visit to Downing Street.
Will he be Gordon Brown’s new political Apprentice? Appointing the hard-baked entrepreneur as a new minister would certainly be a radical move. Next stop: JK Rowling for culture secretary?
You may not have noticed, but bank shares have more than doubled from their recent lows as sentiment warms – temporarily or otherwise – to the sector in the wake of government rescue plans on both sides of the Atlantic.
This has repercussions, not least for Lloyds; which is already 43 per cent owned by taxpayers. To participate in the British government’s insurance scheme that figure could rise to 63 per cent (or higher in economic terms).
One advantage of a blog is you can flag up curiosities before they become mainstream news. Take the threat of industrial action over foreign workers, which I mentioned here three weeks ago.
I mention this before drawing your attention to a small and obscure clause in the Hooper report on the modernisation of the Royal Mail.
Norman Lamont told me last night that he was flattered by the use of the “green shoots” phrase by business minister Shriti Vadera.
He argued that words had been “pretty accurate” given that Britain pulled out of recession in the summer of 1992. He had spotted only “shoots, not bushes”.
Norman Lamont was ridiculed as Chancellor during the last recession not only because he sang in the bath as Britain exited the ERM but also because he spotted the “green shoots” of recovery far too early.
Shriti Vadera, Berr minister, has just made the same clanger. Baroness Vadera told ITV News today:
John Ralfe, the pensions guru, drops me a line – in mock horror – to complain about the latest sneaky stealth tax.
“In completing my quarterly company VAT return today for the end of December
2008 I notice the following,
I am starting to wish I’d spent yesterday afternoon in the Lords rather than following the navel-gazing Commons debate over the structure of the committee looking into the Damian Green affair. (Why do MPs always turn up en masse when talking about themselves?)
Some real gems in the Lords’ Hansard.
We spotted the rapidly rising cost of insuring UK gilts against default in this blog on November 24.
Today the Tories pointed out that the relevant figure (credit default swaps) is now twice the cost of insuring the debt of McDonald’s, the fast food chain.
Peter Mandelson said at the weekend that there would be “no blank cheque” for industries suffering from the credit crunch.
But he sounded a little disingenuous when he claimed: “I don’t expect such a queue to form and one will not be welcomed.”
This Bloomberg chart tells a striking tale. Credit default swaps are a form of insurance on gilts. People buying UK government debt acquire CDS’s to protect themselves against the risk of the country becoming bankrupt.
The Conservatives have proposed a VAT holiday for struggling small businesses.
A six-month deferment would prevent some companies “going to the wall,” according to George Osborne.