The FT outlines that the Chancellor will today levy a one-off tax on the bonus pools used by banks for staff compensation. Its purpose is to warn banks to “think twice before they pay what the government deems to be excessive bonuses.” The Times reports that bankers across the City are trying to change the terms of their pay deals to avoid the tax. Stephen Cahill, a partner at Deloitte, said: “Banks could look at capital gains ideas as the Government’s proposal may be an income tax. They could also look at deferring more of the bonus so that it is taxed in future years.” The Guardian quotes Jon Wood, a hedge fund manager: “It wasn’t all the bankers’ fault.” He predicts that bankers will find a way around the taxes: “The City will be ahead of the Treasury.”
The pre-Budget report is expected to be broadly fiscally neutral this year as Alistair Darling has concluded that it is too early to begin a more ambitious assault on the deficit because of fears that deeper spending cuts could choke off the recovery. David Cameron, Conservative leader, said a Tory government would move more quickly, adding that the level of borrowing was “sapping confidence” and troubling the markets. Longer term, only schools, hospitals and the police will be spared from public spending cuts. Average cuts are estimated by the FT to be about 14 per cent over three years. The Independent reveals that Darling will delay a flagship scheme to allow 11 million workers to have personal pensions, saving between £1bn and £2bn in tax relief. But a new Treasury body, Infrastructure UK, will be set up to identify the country’s needs for big infrastructure projects. According to the Guardian, the government will make the case for a “Tobin” transaction tax on all City trading, an idea gaining support in Europe and the US. The Times reports poor economic news as industrial output failed to grow in October and a “gloomy” CBI survey while the Telegraph cites Moody’s warning that the UK faces “an inexorable deterioration of debt affordability in the short term under almost all foreseeable scenarios.”
Sir John Scarlett, who was the head of the Joint Intelligence Committee in the run-up to the war, has appeared before the Chilcot Inquiry. Speaking about the so-called ‘Dodgy Dossier’, he said, “The foreword was an overtly political statement by the Prime Minister so it was his wording and his comments throughout.” Sir John said that he regretted the claim that Saddam could deploy WMD within 45 minutes. The Times and Independent reveal that Blair received two secret intelligence reports saying that Saddam Hussein did not have working weapons of mass destruction just days before ordering the invasion of Iraq.
The Telegraph and Mail have leapt on a new National Statistics report to claim that “one in ten living in the UK is now foreign-born.” Both papers quote the ubiquitous Sir Andrew Green: “This report confirms the massive impact of immigration on our population under the present Government. It must be brought under control, but so far Government policies are completely inadequate for the purpose.” But as Left Foot Forward showed yesterday, the report also shows that the projected rise in population to 70 million is due to rising births and fewer deaths, rather than immigration.
A leak of the Copenhagen agreement to the Guardian is concerning developing countries. The draft hands effective control of climate change finance to the World Bank; would abandon the Kyoto protocol – the only legally binding treaty that the world has on emissions reductions; and would make any money to help poor countries adapt to climate change dependent on them taking a range of actions. Lumumba Stanislaus Di-Aping, the chief negotiator for the G77, a group of 130 developing nations including China, is quoted in the Telegraph saying that the leaders of the rich world had a “moral obligation” to cut greenhouse gases. He also said President Obama was condemning “the cousins and extended family of his own daughters to be destroyed to preserve the interests of the few”. Meanwhile, British Airways’ chief executive, Willie Walsh, has warned that the Conservative party’s policy to block a third runway at Heathrow will be the “biggest mistake ever”.
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