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This week in Politics

Following on from last week’s ‘Money isn’t everything’ speech from David Cameron Shadow Chancellor George Osborne moved further away from traditional perceptions of the Tory Party telling the BBC the next Conservative manifesto will not pledge tax cuts.

Osborne said the large amount of borrowing by the country makes tax cuts unaffordable and stressed stability was the overriding concern. The economy is one of the few areas where Labour is still way ahead in the polls and the Tories will have to work as hard as the Labour Party did in the mid-nineties to convince the electorate they are a safe pair of economic hands.

Osborne also used a speech in Manchester this week to declare he would take on vested interests that support tax reliefs and tax breaks with a ‘radical overhaul’ required to address the complexity of the current system that is undermining UK competitiveness.

He is unlikely to resurrect calls for a flat-tax but the work of his tax reform group, led by Thatcherite former MP Michael Forsyth, could be an interesting alternative to the Government’s better regulation taskforce agenda aimed at cutting red tape.

Business leaders have been receptive to Osborne’s vision of exchanging certain tax perks for a simpler system but he will not yet comment on specific reliefs that would be axed.

The Social Market Foundation thinktank this week claimed NPSS auto-enrolment will remove the need for many tax incentives to save- with savings then targeted at low income families and SMEs- and the Tory proposals could put fundamental reform of the pension tax system back on the political agenda.

The rightwing Cornerstone group of Tory MPs launched a counter offensive against Tory rebranding calling on Cameron to spend less time with ‘the pseuds and posers of London’s chichi set’, but with the momentum Cameron and Osborne are developing its looks unlikely they will pay much attention to such dissent.

The Government’s tax credits system got yet another bashing this week after new figures showed overpayments totalling nearly 4bn in the last four years.

LibDem Shadow Work and Pensions Secretary David Laws called for Paymaster General Dawn Primarolo to be sacked and a major overhaul of the way credits are administered.

Former welfare minister Frank Field also laid a boot in claiming the credits are the bluntest of anti-poverty weapons and ‘the equivalent of attempting delicate key hole surgery with a hacksaw’.

With the prospect of means tested pension credit still applying in some form for around a third of pensioners- at the Government’s most optimistic forecast- questions will again be asked as to whether far more should have been put in the White Paper to drastically simplify benefits in this area.


Risk is the word

Last week was certainly a rollercoaster ride for those in equity markets. Risk is suddenly on everyone’s lips.

FSA warns it will seek out loan rogues

The FSA has warned mortgage brokers that it is ready to get tough and use its enforcement regime to force rogue firms out of the market. Speaking at the Association of Mortgage Intermediaries’ annual dinner in London last week, FSA chairman Sir Callum McCarthy said it is vital to get tougher on the mortgage market […]

Yousefi denies need for BTL regulation

The buy-to-let market does not require formal regulation, says Alliance & Leicester head of intermediary mortgages Merhdad Yousefi. He claims the current system where BTL mortgages are policed under the Consumer Credit Act represents sufficient consumer protection. The Treasury has yet to reveal any plans to regulate BTL although many industry commentators believe it is […]

Sipps not necessarily better than SSASs, says Alliance Trust Savings

IFAs should not automatically favour Sipps over SSASs, says Alliance Trust Savings.The group says SSAS arrangements still have a valuable place in the market and that some clients may be unhappy about the way their SSAS has been administered.It says many long-time SSAS-supporting life offices are focusing instead on growing their Sipp business.Alliance Trust Savings […]

UK: mid-year review and outlook

By Mark Martin, manager of the Neptune UK Mid Cap Fund, and Scott MacLennan, manager of the Neptune UK Opportunities Fund H1 2014• Equity markets continued to show strength: despite a strong rally in 2013 driven by a market-wide re-rating, equity markets continued to generate positive returns for investors. Economic activity continued to be stimulated […]


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