Today's revelation that pension fund tax relief will be severely scaled back for those at the top end of the spectrum has cast further light upon David Cameron's support from the middle classes. When you take into account recent tax rises, the abolition of child benefit for those on higher incomes and now the scaling back of tax relief on pension fund contributions, is David Cameron in danger of losing the support of the middle classes?
The UK government has today confirmed that hundreds of quangos will be scrapped, merged or scaled back. However, this has provoked a furious backlash from trade unions and senior civil servants who believe that it will be counter-productive with regards to the long-term aim of making government spending more transparent for the UK public. However, there is a sting in the tail!
The UK government has recently revealed that more than 15 million pensioners and millions of other people claiming benefits from the UK welfare state will soon have their payments reduced in real terms. The government has decided to change the historic measurement index of the retail prices index, which currently stands at 4.6%, in favour of the consumer prices index which currently stands at a lower 3.1%.
Despite the fact that an estimated 6 million people in the UK have, or will soon, received demands for additional taxation because of errors by HM Revenue and Customs, it now appears that this 6 million figure was just an estimate and could even be higher!
As the latest BDO business trends survey casts a very dark shadow across the UK economy there is a suggestion that UK consumers are "frightened of spending cuts". There is growing concern that consumer sentiment has been impacted by the headlines in the financial press with regards to UK budget cuts even though the vast majority of these will be phased in over a four-year period. While there will be definite pain in the short-term there is no doubt that the UK government cannot afford to phase in massive cuts in a very short space of time.
Willie Walsh, the chief executive of British Airways, has today attacked government plans to increase air tax in the UK under the "green" banner. Like many people in the industry he believes that after a period when growth was encouraged by governments around the world the airline industry is now being penalised for this investment by the very governments which pushed the issue in the first place. So is this fair?
Ed Miliband has today joined the discussion regarding graduate fees and offered disillusioned members of the Liberal Democrat party a way to express their anger. It is expected that Lord Browne's report into the further education system in the UK will recommend changes to the fee structure which could see some university fees increasing to around £12,000 per annum. So what is Ed Miliband suggesting?
Lord Browne is expected to release his long-awaited review of tuition fees in the UK and possibly kill stone dead the idea of a graduate tax which had been championed by business secretary Vince Cable. Instead it is believed that Lord Browne will recommend that tuition fees are increased, possibly trebled, and universities should be allowed to keep fees of up to £10,000 a year. So what does this mean for UK students?
As we covered earlier this week, the European Union is looking at ways of reducing bonus payments for the European banking sector and deferring as much of the larger payments as possible. It is believed that the EU would prefer to see up to 60% of banking bonuses deferred over a potential five-year period although it has been revealed that taxation on bonuses would be expected upon the award of the shares and cash, even if they are freed-up many years later.
George Osborne is today beginning the fightback in relation to criticism of his public sector spending cuts which will be confirmed in just a few days time. Ahead of a meeting of economic leaders in Washington he has criticised those who have talked down the need to reduce the public sector budget deficit claiming this is undermining recovery in the UK. There is no doubt that if the budget deficit had continued forever and a day then eventually the UK would have run out of money and the economy would have died a death.
