Bill Roache, aka Coronation Street’s Kenneth Barlow, has come out strongly against the governments plans to introduce a £20,000 death tax to fund care for the elderly. In the short film which has just been released by the Conservative Party he says:

“When it comes to residential care the Conservatives have set out plans for a voluntary insurance scheme, and that seems like a good idea. It means that people have the option to protect themselves against spending all their savings if they go into care, and they don’t have the fear of losing their home. continue reading

An incoming Tory government would be ready to put up taxes in order to get the UK’s soaring deficit under control, Ken Clarke has said.

The shadow business secretary said it would be “folly” to rule out increases alongside reductions in public spending.

The comments came as David Cameron effectively kicked off the general election campaign, urging voters to make 2010 a “year for change”.

Speaking from his Oxfordshire constituency on Saturday, Mr Cameron said a “a complete overhaul” of the economy would be necessary to reduce the deficit:

“We’ve been clear about our intention to cut public spending, and clear about where some of those cuts will come – from a one-year freeze on public sector pay to bringing forward the planned increase in the state pension age. But it’s not enough just to deal with the deficit. To have a hope of competing in the decades to come, our economy needs a complete overhaul. We need to build an enterprise economy.”

The Conservative leader is expected to make an audacious raid on traditional Labour territory on Monday by pledging to divert more money to healthcare in the UK’s most deprived areas.

In his interview with the Sunday Telegraph, Mr Clarke said: “It’s something that every Conservative tries to avoid but I didn’t avoid it when I was getting us out of recession before.

“Coming out of a recession when you have such a severe deficit, you can’t rule out putting up taxes.

“If you can’t get it down quickly enough, in order to maintain the confidence of the markets and to create conditions for growth and employment, then you may have to look at tax increases.”

Asked specifically about VAT, which some observers expect the Tories to raise to 20% if they win power, the former chancellor said: “When you’re the most indebted country in the Western world… then you cannot start promising you are not ever going to start increasing taxation.

“We will try to avoid it, we’ll minimise it if we have to by having proper control of public spending, which we haven’t had in this country in the last 12 years.”

Whitehall civil servants shared bonuses of almost £130 million last year, new research shows.

It means nearly £2.5 million a week – or more than £350,000 a day – went on performance-related pay for Government workers in 2008/09.

Some mandarins enjoyed payouts of almost £50,000 – twice the threshold of Chancellor Alistair Darling’s “bonus tax” on bankers introduced earlier this month.

The Liberal Democrats described the figures as “ridiculous”, while the Tories said bonuses should be linked to saving taxpayers’ money and campaigners accused the civil service of being out of touch during the recession.

Analysis of Parliamentary questions and departmental accounts found the Whitehall bonus pot for 2008/09 added up to £129,393,139.50 – around £2 for every man, woman and child in the UK.

The figure was made up of end-of-year payments and rewards for performance on projects throughout the year.

The highest-spending department was the Ministry of Defence, which has been heavily criticised for handing out £53 million in 2008/09, while the Department for Work and Pensions paid out more than £23 million with a further £6 million allocated for in-year rewards.

The Department for Transport set aside £12 million for bonus payments and the Foreign Office spent £7.6 million rewarding staff.

One senior civil servant at the Department of Health received a payment of £49,004. The biggest Foreign Office bonus was £30,000 and several other departments handed out lump sums worth more than £20,000.

Taxpayer’s Alliance chief executive Matthew Elliot said: “There’s no way that civil servants, or indeed any public sector workers, should receive bonuses this year.”

The bonuses are officially termed “non-consolidated performance payments” and several ministers sought to justify them by saying they were to reward “exceptional” performance and link pay to delivery across the year.

Francis Maude, the shadow cabinet office minister, said: “It is unjustifiable that Whitehall departments which have failed to deliver have still been awarding bonuses.

“There should be no rewards for failure, either in the private sector or public sector. Performance-related pay in Whitehall should be linked to increasing efficiency and rewarding civil servants who save taxpayers’ money. But no one can defend bonuses indiscriminately handed out.”

The Chancellor wanted to do more to tackle the UK’s ballooning deficit but was overruled by the Prime Minister, according to reports.

Alistair Darling originally came up with “tougher” measures for this week’s pre-Budget Report (PBR) to start making inroads into the £178 billion of public borrowing needed this year, according to the BBC.

But with an eye on the election, Gordon Brown stepped in to maintain a multibillion-pound spending boost to protect frontline services like schools and the NHS.

According to the Guardian, the Treasury wanted to raise the VAT rate above 17.5% next month – a move that could have raised billions for the public coffers.

But Mr Brown and his allies opted instead for a later hike in national insurance, the paper said, fearing the VAT rise would hamper any economic recovery.

A Treasury official told the Guardian: “Ministers look across the range of options and it is no surprise that other ways of revenues were being examined.”

Defending the PBR and the measures taken by Mr Darling, David Blunkett said that the Treasury sources should to be ashamed of themselves if Britain’s credit rating is effected – he added that the government aim to halve it in four years was ambitious, but had to be done.

“If any of these so-called sources… from the Treasury undermine our credit rating… they ought to be ashamed by themselves,” he said.

He added that a longer term view was needed on the deficit, noting that it was “not until 2002 that this Labour government paid off the debt from the second world war” and backed the scale of borrowing saying “if the roof’s taken off your house you take a mortgage out to put it back on”.

In Wednesday’s PBR, Mr Darling predicted borrowing costs would increase this year to £178 billion – up from a previous estimate of £175 billion. He pledged to halve the deficit over the next four years in an “orderly way” that would not threaten the recovery.

On Thursday, Mr Darling was warned by the influential think tank the Institute for Fiscal Studies that he must find £36 billion in new spending cuts if the Government is to meet its commitment to halve the budget deficit over the next four years.

Philip Hammond, Shadow Chief Secretary to the Treasury, said that the reported rift between chancellor and prime minister over the pre-Budget report shows that the Treasury agrees with the Conservatives on the need for a quicker reduction in the deficit.

“While Gordon Brown is attempting to create artificial dividing lines the Treasury is agreeing with us and leading commentators that what’s good for the country is a quicker reduction in the fiscal deficit,” he said.

“Once again Gordon Brown has intervened, insisted on party ahead of country.”

He said Labour were “concealing plans from the general public,” because a consensus on how to deal with the deficit had not yet been reached.

“At the heart of government there is a conflict between the Treasury, who want an early start to fiscal tightening and No.10 Downing Street – Gordon Brown – who wants to claim that that would undermine recovery.”

Britain may lose its top credit rating unless borrowing is cut faster, that is the conclusion of George Osborne after spending the majority of last night digesting Alistair Darling’s Pre-Budget Report.

In an interview with Reuters Mr Osborne spoke for the first time of his fears that Britain could be stripped of its AAA credit rating.

“The bulk of dealing with the deficit has to come from spending restraint,” Osborne said. “Unfortunately, the measures announced yesterday don’t start tackling the deficit until 2014/15 and that is far too late.”

“The thing I am aiming for is making sure that Britain keeps its credit rating.”

Ratings agencies have warned that Britain’s triple-A credit rating, which enables the government to borrow more cheaply than less credit-worthy nations, could be at risk unless the government lays out a credible plan to cut the deficit. Both Standard & Poor’s and Moody’s have said that the countries long-term credit worthiness is at risk if meaningful measures are not implemented to get debt under control.

The Shadow Chancellor has already said that he will deliver an emergency budget within 50 day’s if the Conservatives are victorious next year, and argue that hacking back debt will safeguard confidence and keep interest rates low, enabling a sustainable recovery to take root.

“We’ve got to keep interest rates as low as possible for as long possible,” Osborne said.

The Conservative leadership believes the Bank of England would do what is necessary to drive growth forward, allowing the party to get painful cuts in spending out of the way quickly.

Interview on the Today Programme this morning, Mr osborne accused the Chancellor of using the PBR for electioneering purposes, and highlight the fact that the national insurance increase will reduce the NHS budget by £446 million because it is the countries biggest employer.

“That national insurance increase will lead to a real cut in health spending.”

He went on to stress the need to deal with the deficit and the importance of being upfront about it.

“It’s got to be honest, we’ve got to stop having a pre-election con. You’ve got to be honest with people that there are tough choices coming,” he added.

George Osborne has two clear lines of attack on Alistair Darling and his Pre-Budget Report today, first NHS cuts and second a temporary increase in benefits.

Yesterday Mr Darling announced that he planned to bring forward a 1.5 per cent rises in child and disability benefits to 2010.

But the independent think tank, Institute for Fiscal Studies, believes this increase will be funded by cuts to the very same benefits a year later.

The shadow chancellor, said Mr Darling had missed an opportunity “to be honest with the public” and accused him of a “pre-election con” in trumpeting positive measures that would have to be paid for later.

Mr Osborne also suggests that while the Government talks of NHS spending, there will actually be cut in NHS spending, this is because the NHS employs so many people. According to Conservative predictions the increase in employers’ National Insurance contributions will take a £446 million out of NHS budgets.

Interview on the Today Programme, the shadow chancellor said “The government are shooting themselves in the foot.”
“That national insurance increase will lead to a real cut in health spending.”

He went on to stress the need to deal with the deficit and the importance of being upfront about it.

“It’s got to be honest, we’ve got to stop having a pre-election con. You’ve got to be honest with people that there are tough choices coming,” he added.

Mr Darling has defended his decision to delay billions of pounds in public spending cuts until after the general election, saying that he wants to establish growth before trying to halve the deficit over the next four years in an “orderly way” that would not threaten the recovery.

Appearing on GMTV he said, “Of course there are some people who say we should go faster and further … I don’t think that would have been right. I think it’s important that we continue to get ourselves through one of the steepest downturns we’ve ever seen.”

But he conceded “some difficult decisions” will have to be made to bring down the country’s £178 billion annual deficit.

“We’re not out of recession yet, there’s a lot of uncertainty around,” he said .

Mr George Osborne accused the Government of “building up debts that will cripple this country”. Also appearing on GMTV he said: “This country has enormous debts. The Government has left an enormous economic mess.”
He also used the opportunity to reinforced the Conservatives latest digital advert by saying the tax was “an income tax on anyone earning over £20,000″.

“Now Labour’s class war involves anyone earning over £20,000,” he added, but was not yet in a position to promise to reverse it, but that this was the measure he would most wanted to avoid implementing.

CCHQ is set to unleash a fresh PR campaign attacking the Labour Party following today’s Pre-Budget Report.

Highlighting the 0.5 percent increase in National Insurance contributions announced by Alistair Darling earlier today, the new campaign will appear on digital poster sites, online and in direct mail.

This builds on last nights PR stunt when they projected a debt clock onto Battersea Power Station, highlighting the fact that debt is increasing by more than £5,000 per second.

Labour have lost their “moral authority to govern” by putting electioneering ahead of fixing the economy, shadow chancellor George Osborne has said.

Responding to the Pre-Budget Report, Mr Osborne told the Commons Alistair Darling had put off tough spending decisions until after Britain goes to the polls.

He accused the Chancellor of failing to produce a plan for dealing with Britain’s debts, failing to restore confidence in Treasury forecasting and failing to convince the world that the country is open for business.

And he described the decision to increase National Insurance rates as a “tax on jobs”.

Mr Osborne told MPs: “Today, confronted with the biggest budget deficit in our peacetime history, he faced a choice.

“Would he take the tough spending decisions before the General Election or would he completely duck them?

“We were promised a Pre-Budget Report and what we got was a pre-election report. They have lost all the moral authority to govern today.”

Mr Darling told the Common’s that he would increase National Insurance contributions by 0.5 percent from April 2011, which he predicts will raise an additional three billion pounds a year.

The government needs to raise funds to plug a budget deficit running at a record 12.5 percent of national income.

In a bid to placate core Labour voters Mr Darling said he would protect those on low incomes my raising the starting threshold.

“No-one earning under £20,000 will pay any more national insurance contributions as a result,” Darling told the House.

Saying that it was payback time for banks that lost a combined £80 billion last year and needed taxpayer-funded bailouts to stabilise the system, the Chancellor confirmed that he would levy a one-time tax on bankers’ bonuses. The The 50 percent tax on bonuses above £25,000.

“There are some banks who still believe their priority is to pay substantial bonuses to some already high paid staff,” Darling told Parliament.

“Their priority should be to rebuild their financial strength and to increase their lending,” he added. “If they insist on paying substantial rewards, I am determined to claw money back for the taxpayer.”

The tax will be imposed on the pool of bonuses paid by a bank, rather than individual payments and it will be paid by the bank — not the recipient of the bonus.

Darling said that measures to keep people from avoiding the bonus tax would be introduced “with immediate effect.”

Darling also used the Pre-Budget Report to downgraded his forecast for the economy this year, saying it will shrink by 4.75 percent. This is significantly worse that the 3.25-2.75 percent contraction he predicted at the time of the budget in April.

He retained his forecast of gross domestic product growth of 1-1.5 percent growth for next year, but also raised his 2009-2010 borrowing forecast slightly to 178 billion pounds, from 175 billion pounds previously.

Responding to the PBR George Osborne said Labour should “never be trusted” with people’s money again, and described Mr Darling’s report as a “catastrophe”.

Every family in the UK would be “paying the price” for Labour’s mistakes, he said, claiming anyone earning more than £20,000 would pay more tax as a result.

Attacking the chancellor’s forecasts for economic growth and borrowing as flawed he said Labour had lost the “moral authority” to govern.

“We were promised a pre-Budget report and we got a pre-election one,” he said. “No-one will believe a word they say on the economy again.”

Mr Osborne said the government was planning to borrow nearly £800bn over the next six years, describing the figure as “criminal” and saying the UK was turning into the “sick man of Europe”.

On bank bonuses, he said the proposed tax should not be considered a “triumph” as the government should have prevented the bonuses being paid in the first place.

In his scathing attack, the Shadow Chancellor claimed the Prime Minister’s reputation for economic competence was shot to pieces. “At the end of their period in office they have indeed adhered to that greatest of golden rules — never, ever, trust a Labour government with your money,” adding “Everything they have told us on the economy collapses in the face of the truth.”

A one-off tax on bankers’ bonuses is expected to form the centrepiece of Alistair Darling’s make-or-break pre-Budget report today.

The Chancellor’s statement will set the scene for the general election campaign, with Mr Darling explaining how the Government plans to slash its record £175bn-a-year borrowing by half by 2014.

A new super-tax of around 50 percent is expected to be levied on City bonuses over £25,000, due to be paid in the coming weeks. Ministers are keen to address public anger over the prevalence of the bonus culture, despite the billions of pounds of public money spent on bailing out troubled institutions.

Ken Clarke, The Shadow Business Secretary, said that plans for a tax on banker bonuses was a distraction from the key issue of how to deal with the deficit.

He said he shared the public anger for bankers, but added of the plans to tax their bonuses: “It’s all tinsel really – because they will pay themselves in other ways.”

“It’s just the sort of stuff that Gordon and Peter have insisted the chancellor, who they didn’t want to be chancellor, put in,” he added.

He said serious spending plans were needed and a strategy to protect quality in key areas.

“You’ve got to do it by getting more for less. You’ve got to stop the process of pouring money over, which Gordon Brown indulged in,” he said.

“A credible path for getting out of deficit and debt in a reasonable time – that’s the key thing.”

Other options open to Mr Darling include raising capital gains tax, inheritance tax or even VAT. With the public finances in such dire straits, he could also freeze income tax thresholds, drawing some 70,000 more workers into the 40% tax band.

Although he will not announce a full spending review today, Mr Darling is likely to give some broad outlines of cuts and efficiency savings planned over the coming years.

He may have to open his speech by upgrading his estimate of the deficit for 2009-10 to £180bn, after official figures showed the Government had already borrowed almost £87bn by October and was on course to overshoot his Budget prediction of a £175bn shortfall.

Harriet Harman said that the City of London has been important to Britain “since the days of Dick Whittington” but after the public finances bailed out banks, there cannot be a return to “business as usual”.

“Since the days of Dick Whittington of the City of London ages ago, our financial services and the City of London has been important”.

She added that “the government have said that when the public finances have stepped in to support the whole finance sector … that we can’t have a situation where it’s back to business as usual.”

Meanwhile, the City continued its efforts to dissuade Mr Darling from introducing the super-tax, with a new report suggesting financial firms paid £61.4bn in taxes in the year to March.

The PricewaterhouseCoopers report, commissioned by the City of London Corporation, revealed financial services firms contributed 12.1% of the Treasury’s total tax take.

Stuart Fraser, policy and resources chairman of the City of London Corporation, said: “There is always a tipping point where changes in the business environment – both in terms of regulation or taxation – begin to affect a country’s competitiveness and damage the ability to attract top talent, which may choose to move to rival financial centres instead.”

This year’s tax take from financial services firms is however £6.4bn below two years earlier, mainly due to lower corporation tax paid on profits.

And the tax take has also been dwarfed by the scale of the public support needed to stave off a financial collapse.

Last week the National Audit Office (NAO) said a mammoth £131bn is expected in total taxpayer outlay on bank bail-outs by the end of this year, including last year’s Northern Rock nationalisation – although the Government should receive £14bn in fees.

The total public sector support – including borrowing guarantees and liquidity support from the Bank of England, as well as savings depositor protection – runs to £850bn, the NAO said.

David Cameron said that he feared the Pre-Budget Report would be a political statement, and called for the government to acknowledge the scale of the deficit.

“This ought to be a day of reckoning but I fear what we will get is a pre-election report rather than a Pre-Budget Report,” he said.

He said the government had been “utterly careless” over the size of the deficit, and called for “a bit of acknowledgement” of its size and the need to tackle it.

Ahead of Wednesday’s Pre-Budget Report, Prime Minister Gordon Brown is set to announce how the Government plans to reduce public spending – starting with the streamlining of Whitehall and shelve or abolishing low-priority programmes.

Mr Brown said he will make efficiency savings worth £12 billion over four years as he tries to show he can halve the country’s massive budget deficit in that time.

On Wednesday Chancellor Alistair Darling is expected to confirm annual borrowing will top £175 billion.

Mr Brown will announce £3 billion of additional efficiency savings identified by the Government since the Budget in April.

Of that, £1.3 billion will be achieved by streamlining central government indicating that certain programmes will have to be delayed or abandoned.

“In order to protect the frontline services we value at a time when budgets are tighter it means we need to do what households up and down the country do to prioritise the necessities and postpone the things we can do without,” adding that the Government will be “relentless” in finding new ways to save money and take the “tough decisions” needed to realise them,” he said.

“We have already promised savings of £35 billion a year by 2011 on top of the £26.5 billion a year already delivered through the Gershon review.

“But by identifying new ways of working – and being prepared to make the tough choices – we can deliver in excess of another £12 billion in efficiency savings over the next four years. This includes £3 billion of new efficiency savings identified since the Budget – of which over £1.3 billion will come from streamlining central government.”

The Prime Minister placed a new emphasis on “value for money” and said that technological advances can enable services to be both responsive and more cost-effective.

One of New Labour’s flagship IT projects, the controversial NHS IT system, is set to be scaled back significantly after Mr Darling told Andrew Marr that it was “something that I think we don’t need to go ahead with just now “.

The scheme, which is one of the world’s biggest civilian IT, is already hugely over budget and several years late.

Following the Chancellor’s announcement Treasury officials rushed to explain that the government was looking for “significant savings” of around £600 million over the medium term by cutting back some features that are less important for patients. A senior health department official, meanwhile, said bluntly that “the chancellor mis-spoke” in saying the project to create an electronic medical record would be scrapped.

Unions expect cuts in senior civil service jobs of up to 20% as part of the Government’s plan to slash public spending while – the Prime Minister said – protecting frontline services.

But union leaders attacked what they described as “irresponsible” cuts in civil service jobs. The FDA, which represents senior civil servants, branded the move “crude electioneering”.

Its General secretary Jonathan Baume said the senior civil service had grown over the past decade because ministers had “significantly extended” the role of central government.

He added: “It is likely that, in the first period of a new Parliament, ministers will need all of the currently available resources to take forward manifesto commitments and likely reforms to public services in the coming decade, even if the senior civil service eventually contracts in size as these reforms bed down.”

Senior civil servant who’s salaries are above £150,000 and £50,000-plus bonuses would require ministerial approval. Top public sector earners would also be “named and shamed”, he said, warning that some had “lost touch” with reality.

The Treasury is also planning to introduce a one-year ’supertax’ on bankers bonuses in a bid to raise hundreds of millions of pounds. It is believed that those close to the Chancellor favour this over taxing banks directly as it does not run the risk of weakening them further.

Speaking to the Financial Times Chris Sanger, head of tax policy at Ernst & Young, said the most likely mechanism to meet these ambitions would be a special tax for high-income individuals who receive a large proportion of their income in one month of the year. “The impact would be to change the nature and system of banking pay,” he said.

But banking chiefs have reacted angrily to the news, Angela Knight from the British Bankers’ Association (BBA) called such taxes “populist, political and penal,” adding that focusing tax plans specifically on bankers would send the wrong message to the rest of the world about the UK’s position as a banking centre.

“We have already seen quite a few companies shift out of the UK,” BBA chief executive Angela Knight told the BBC. It might be popular to put very high taxes on a few [bankers], but we need to know how we would look internationally.”

Other savings planned include getting more services online, which could cut £600m from telephone and paperwork costs, and a 50% reduction in consultancy fees and 25% in marketing.