VAT increase starts the political arguments

MIDNIGHT on Tuesday saw the expected rise in VAT from 17.5% to 20%.  This policy is part of the spending deficit that the country finds itself in, and already – the political parties are at war.  Chancellor George Osbourne insists that this was the only way forward, whilst under pressure Labour leader Ed Miliband claims that it is ‘the wrong tax at the wrong time.’

The Treasury hopes to gain about £13billion because of the VAT increase, therefore cutting the expansive gap between government spending and income.  The new measure shouldn’t affect consumers too much, as it means that just 2p gets added onto every £1 item.  Only food and children’s clothes have survived the new increase, which is a permanent move, unlike the cut to 15%, put in place by former Chancellor Alistair Darling in November 2008.  However, the news won’t be great for some.

INCREASE: Petrol prices are set for another rise

Petrol prices, set to reach their highest levels for at least a decade later in the month, will increase by 3p a litre under the new restrictions.  Bigger and more expensive electrical items are also likely to be far more expensive than they were before Christmas.  Some televisions will be sold at £10 more than they were in 2010, whilst PC’s, laptops and game consoles will also be significantly affected. 

DECLINE: HMV faces an uncertain future

Retailers now have decisions to make and all are approaching it in different ways.  Debenhams has announced that it will only charge the new prices on its new season stock, whilst Superdrug has confirmed that its own branded products will remain at the same price.  However, with HMV and Next recently posting massive loss of profits over the festive season, the ways they want to implore the cost might well be as limited as a world class CD of your favourite songs. 

Retail outlets did report massive business over the course of last weekend, as television advertising campaigns were run regularly, urging customers to beat the VAT increase.  It seems like the ‘old’ tradition of the January sales have slumped to a halt.  Many retailers are very worried about the VAT hike, and are already forecasting tough years ahead of them, warning that thousands of jobs could go, due to the price increase.  Retail analysts do predict that on a long-term basis, it will be the customers who end up losing out the most under the new method. 

The Chancellor seemed confident about the changes, when he spoke to the media on Tuesday: “VAT is a powerful weapon to tackle debt and if we don’t use it, then the spending cuts would be over £13billion pounds bigger.”  

Unsurprisingly, Labour and its leader disagree; “When family budgets are already squeezed, now is not the time for a VAT rise to make it even harder for ends to meet.”

Whatever the final outcome, the retail industry is in for a very challenging and demanding year.

2010: A year in politics

CHANGING times in politics and 2010 has been a very busy and chaotic year.  Demonstrations, recriminations, ramifications, blunders – it has had as much drama as a typical episode of Holby City.  A new coalition government, a new era or the same old story for some, this year has been the most dramatic in politics for some time.

DOOMED: Darling's budget bought grim news

It all began in January when Geoffrey Hoon and Patricia Hewitt tried to start a rebellion to usurp Gordon Brown from his position as leader of the Labour party.  This failed miserably, but it summed up the frustrations of some within the Labour government.  They were convinced that they were going to lose the General Election.  The bad press continued as three Labour MP’s were charged over their use of expenses from the devastating political scandal that ripped through the system in 2009.  Alistair Darling’s final budget as Chancellor of the Exchequer in March bought the predictable grim news that we were all fearing.  However, these fears would be briefly replaced by a sense of election fever.

TWIST: The leadership debates bought more intrigue

Gordon Brown, David Cameron and Nick Clegg went onto the campaign trail across the country.  Power swayed between the three political parties, which included live televised leadership debates.  Held on ITV, Sky and BBC for three consecutive Thursdays in April, the debates sparked a new form of interest to many, especially as these were held in primetime form.  Brown’s chances of staying in Downing Street took a significant blow, when he had a fateful meeting on immigration with long-time Labour supporter Gillian Duffy in Rochdale.  “That was a disaster, everything; she’s some sort of bigoted woman that said she used to be Labour. I mean it’s just ridiculous.”

FISTCUFFS: Adam Boulton vs Alistair Campbell live on Sky

Whilst UKIP leader Nigel Farage was lucky to escape with his life, after a plane crash in a final bid for campaigning votes on Election Day, the election went through with minimal fuss.  The country spoke and a ‘hung parliament’ was the outcome.  The Conservatives won the most amounts of seats, but not the magical number needed for a majority.  Coalition negotiations began between the Conservatives and the Liberal Democrats, whilst Brown sat and waited in No.10, hoping for a miracle to survive.  To keep the election headlines going, Sky News political editor Adam Boulton and ex-Labour spin doctor Alistair Campbell had a near punch-up live on Sky’s Live at Five. 

On May 10, Brown announced he was stepping down as leader of the Labour party.  24 hours later, he decided to quit Downing Street.  As he walked away with wife Sarah and their two children, Brown’s final graceful words were; “As I leave the second most important job I hold, I cherish more the first I have, as a husband and father.  Thank you and goodbye.”

A few hours later, David Cameron rolled into Downing Street with wife Samantha to take the role as Prime Minister.  Nick Clegg took the Deputy Leader role and speculation began on his appointment; would it seem like a bad romance or a match made in heaven. . .

JOY: David Cameron cradles his new bundle of joy

Later that month, David Laws resigned from the new cabinet after claiming expenses to pay rent for his partner.  George Osbourne, the new chancellor delivered an emergency budget in June, stating; “This helps deal the country with its growing massive debts.”  “It pays for the past and plans for the future.”

The summer went past a little quieter, but for the Prime Minister, it bought a mixture of celebration and tragedy.  His father passed away after illness, but David Cameron’s wife Samantha gave birth to a beautiful baby girl whilst on a family holiday.  Florence Rose Endellion Cameron was born into the world at the Royal Cornwall Hospital. 

COMPETITION: Ed beat David to Labour leadership power

In September, Ed Miliband beat stiff competition from Ed Balls, Andy Burnham, Diane Abbott and crucially, his brother David, to leadership of the Labour party at its annual conference in Manchester.  Ed got the nod, as he was backed significantly by the trade unions.  Four days later, David Miliband elected to quit frontline politics to spend more time with his family... 

As the clocks changed, times changed for the coalition government too.  With Ireland in trouble financially, George Osbourne agreed to lend them a massive bailout.  The figure of £7billion was stupid, to help ‘a friend in need.’  Ugly demonstrations soon followed, when MP’s recently decided to increase University tuition fees.  Scenes in London not seen for twenty years horrified many, but bought the popularity of the government significantly down.

2010 has had a load of interesting political stories, far more happened than in the ‘boring’ old days of the 90’s.  Will 2011 bring even more?  What can be said is that 2010’s year in politics will never be forgotten.

The Emergency Budget - Grim News For Everyone

Last week’s emergency budget brought the expected grim news for everyone in the country, as we attempt to deal with the misery from the recent economic crisis and the deficit that Britain faces.  Chancellor of the coalition government, George Osborne has attempted to keep things as positive as they could be, but has still taken the opportunity to hammer people the best as possible.

The most notable change is the increase in VAT, from 17.5% to 20%.  The change will take place, as in effect from January 4^th 2011.  The VAT measures will consequently see a litre of unleaded petrol rise by 3p, a pint of lager go up by 7p and a Ford Focus car, rise in price by over £300.  This VAT alteration will stick for good, unlike the emergency reduction taken out by former Chancellor, Alistair Darling back in November 2008.

Benefits for families, such as the controversial child tax credits will be removed, and public spending has also been reduced, with schools, universities and the police seeing their budgets restricted by a further 25%.  Other big announcements included the rise of the state pension age to 66, and in the recent days, there have been growing suggestions that the retirement age will be increased, so people may be forced to work longer, than they previously thought.  Osbourne also confirmed the selling off by the government of the Student Finance Company.  Student Finance has borne the brunt of thousands of complaints for delays and cancellations of loan and grant payments to hundreds of University students across the country.  This news could make things even more uncertain for students, attempting to beat the recession issue.  Surprisingly, tuition fees were not raised though, which raised an eyebrow with some.

Personal tax allowances have been raised to £7,475 from next April and there will also be a freeze on council tax for a year.  Below are some of the other key points from the Osbourne speech at the House of Commons last Tuesday:

• ·         A two-year pay freeze on the public sector, but there will be a £250 pay rise for workers who earn under £21,000 a year.
• ·         A probe has been announced into public service pensions.
• ·         Economic growth is predicted to be lower than forecast at 1.2% this year. 
• ·         The 10% cider duty rise tax has been axed.
• ·         Tax credits to families earning over £40,000 have been cut.

Immediately, the government has received intense scrutiny, as anticipated, with Labour really pulling the punches in the House of Commons.  The acting leader Harriet Harman has condemned the budget as ‘unfair,’ whilst Ed Balls, a leadership contender for the opposition called it ‘The Budget from Hell.’  Deputy Prime Minister Nick Clegg is also feeling the heat, as it seems like he supported the VAT increase, despite claiming that was never an option in his election campaign.  How much influence David Cameron had on Clegg’s decision remains to be seen.  However, Clegg probably gave in, realising that if he disagreed, he was more than likely going to be outnumbered by Tory MP’s. 

Osbourne has claimed that it was an ‘unavoidable budget,’ and that there was no alternative, but to tackle the massive government borrowing, which has brought Britain onto its sorry knees.  This was a budget that was always going to hit the country hard, whatever the outcome.  Some areas have been hit harder, probably unfair on them, but these cuts/freezes have had to be sorted out, otherwise we will be in an even bigger mess than we were before.  This is something that as a country, we must unite and stick together through the expected pain, as Britain attempts to grapple with the aftermath from the recession.

Railstrike Averted By High Court - But The War Is Not Over!

Thursday’s high court ruling of a national rail strike was averted, but the war is far from over, as the RMT Union has insisted they are still prepared to strike in the future.

The high court ruled in favour of Network Rail, who granted an emergency injunction against the RMT Union.  With a threat of a rail strike out of the way, Gordon Brown is now firmly widely expected to call an expected May 6^th date for the General Election on Tuesday.  The TUC chief, Brendan Barber is blaming the Chancellor Alistair Darling for him to reduce the country’s budget deficits.  He has warned that if not, more strikes could be the way of action this year, following the Network Rail action and the recent cabin crew strikes from British Airways.

Millions of passengers would have been affected by the four-day strike, which would have started on Tuesday morning.  If the strike had gone ahead, only one in five trains had been expected to run.  In the ballot last week, 54% of those who took part in the RMT ballot voted in favour of a strike, but Network Rail’s claims were reliable that the ballot had been unconventional and unreliable.  Only 112 of 4,556 rail signallers were balloted, which showed a complete lack of inaccuracy.  Network Rail suggested that ‘Ghost Votes,’ were used for the ballot.  Some votes used even included signal boxes that have not been opened or used since the 1960’s.

Signal workers can now not strike on Tuesday and a few hours later, maintenance workers also called off their strike.  It means that now delays and cancellations after the Easter weekend are now very unlikely.  Network Rail said it had unearthed massive inaccuracies in the RMT ballot and that the Union had failed to comply with the 1992 Trade Union and Labour Relations Act.  Over 300 potential votes were not cast.  Areas such as Rugby were not balloted, whereas South Tottenham was.  At South Tottenham, eleven signallers were asked to vote, but Network Rail discovered that only three are employed in the area.

Meanwhile, no resolution is in sight with the British Airways cabin crew strike.  The crew have already taken part in seven days of strike action, and talks between the two parties, Unite Union and BA have grounded into deadlock again.  Both are still blaming one another and more chaos is predicted. 

For now, the rail strike is off, but it is far from finished.  Network Rail may have won this battle, but the war is far from finished.