09 July 2015

Week in Brief: UK NEWS

BUDGET: Mr Osborne’s second budget for this year included measures and proposals

• to introduce a new living wage for those over 25, beginning at £7.20 an hour and rising to £9 an hour by 2020;
• to increase the personal allowance to £11,000 next year with a view to a further rise to £12,500 by 2020;
• to increase the starting point for the 40p rate to £43,000 from next year;
• to restrict mortgage interest relief on buy-to-let to the basic rate of tax;
• to restrict to two the number of children to be taken into account for tax credits save for children born before April 2017;
• to freeze working age benefits for four years with an exclusion for maternity pay and sick pay;
• to reduce rents in the social housing sector by 1% a year for four years. Subsidies will, however, be phased out, and market, or near market, rents imposed, for those earning more than £30,000 a year (or £40,000 a year in London);
• to remove automatic entitlement to housing benefit for 18 to 21-year-olds;
• to introduce 30 hours of free childcare for 3 and 4 year olds;
• to align employment and support allowance with jobseekers allowance;
• to transfer the cost of free TV licences for the over 75 to the BBC;
• to reduce the household benefit cap to £23,000 in London and to £20,000 in the rest of Britain;
• to introduce new vehicle duty bands from 2017. After the first year most car owners will pay a flat fee of £140 a year;
• to cut corporation tax to 19% in 2017 and to 18% in 2020;
• to abolish non-domicile status from April 2017 for those who have lived in the UK for fifteen years;
• to clamp down further on tax avoidance and evasion with an HMRC budget increase of £750,000;
• to increase insurance premium tax to 9.5% from November;
• to replace the dividend tax credit with a new allowance of £5000 on dividend income and to increase the rates of tax on dividends;
• to remove the exemption from the climate change levy for renewable electricity;
• to raise a new apprenticeship levy on large employers;
• to fixed the annual investment allowance at 200,000;
• to carry out a consultation on the Sunday trading laws;
• to reform the taxation of banks with an 8% tax on profits and a reduction in levy; and
• to increase the inheritance tax threshold by a new £325,000 family home allowance, which will be phased out for estates in excess of £2 million.

The deficit will continue to be cut at the same pace as during the last Parliament with a net budget surplus postponed to 2019/20. Defence expenditure will increase by an annual 0.5%, meeting our Nato commitments. Public sector pay will rise at 1% per annum over the next four years.

WEATHER: The temperature of 36.7 degrees centigrade (98 degrees Fahrenheit ) recorded at Heathrow on 1 July broke the record for that month by 0.2°C. The temperature at Wimbledon reached 35.7°C.

HEATHROW: The Airports Commission, which was tasked in 2012 with making recommendations on the best option for airport expansion in the South East, has come down unequivocally in favour of a third runway at Heathrow. The committee, led by Sir Howard Davies, had already rejected the idea of a Thames Estuary airport and a bid from Stansted, leaving itself with a choice of the third runway, extending existing runways at Heathrow or building a further runway at Gatwick. The committee considered that the new runway at Heathrow offered much greater benefits than the alternatives, the increased capacity which the Gatwick proposal would generate being largely in the short-haul European market.

The Heathrow proposal is significantly different from that previously rejected by the Prime Minister when he committed himself to Gatwick in 2009. It will, however, encounter heavy opposition from a number of Conservative MPs whose constituencies lie to the west of London;  Zac Goldsmith, the MP for Richmond, who is likely to be a contestant for the London mayoralty, has threatened to resign and trigger a  by-election if Heathrow is selected. The fact that the government has a small majority may make it difficult for it to resist this pressure and is a more likely cause of the Airport Commission’s recommendations being refused than are concerns that the new Heathrow runway will result in unacceptable pollution levels. The Labour party supports the committee’s recommendation.

Gatwick is likely to challenge the commission’s conclusion and in particular the estimates of air passenger growth on which it relied.

BBC: A dispute has broken out over how the BBC should refer to ISIS. 120 MPs have demanded that it cease to use the expression ‘Islamic State’ on the basis that this stresses its association with Islam and gives it status. It is suggested that the term used should be ‘Daesh’ which is more derogatory. The BBC is resisting the pressure for change.

The BBC is proposing to axe 1000 jobs and to trim its management structure in order to save money. It employs some 18,000 people and the reduction in jobs should begin early next year.

DOCKS: Justice, the human rights group, has recommended the abolition of docks in criminal trials in a report which has been welcomed by the Lord Chief Justice. The suggestion is that the defendants should sit in court with their advisers, as they do in the US.

MURDER: John Palmer, a convicted fraudster who has been linked to the Brink’s Mat gold robbery in 1983, was shot dead at his home in Brentwood.

ROYAL OPERA HOUSE: Following booing by the audience, the rape scene in Damiano Michieletto’s  production of ‘William Tell’ will be played without the victim’s clothes being removed.

AIRSTRIKES: The government is giving consideration to extending RAF bombing missions from Iraq to Syria. It is understood that a Commons vote could be held to endorse the proposal once a new leader of the Labour Party has been selected in the autumn. Meanwhile, Harriet Harman, the acting leader, has indicated that Labour will seriously consider government proposals.

REMEMBERANCE: A one-minute silence was held at midday on Friday for the victims of the terrorist attack at Susse, and at 11.30am on Tuesday for the victims of the 7/7 attacks in London in 2005.

WEST LOTHIAN QUESTION: The leader of the House of Commons, Chris Grayling, has set out details of plans which would allow English MPs to veto bills and clauses which apply only to England. The proposals have been criticised by the Labour Party and the SNP as an attempt to manufacture a larger government majority artificially. Changes would not require legislation and could be made by changing the rules of parliamentary procedure.

CHARITIES: Camila Batmanghelidjh, the founder of the charity, Kids Company, which supports deprived young people, is under pressure from the government to step down as its leader on the basis of alleged financial mismanagement. She has indicated that she will not be bullied into resignation and claims to have been targeted after challenging the government’s handling of child abuse enquiries.

A number of prominent charities including the NSPCC, the British Red Cross, Oxfam and Macmillan are facing an investigation by the Information Commissioners Office into allegations that they deliberately targeted vulnerable members of the public in raising funds. It is also alleged that they defied the Telephone Preference Service which is designed to protect its members from unsolicited calls.

MEDAL SALE: The medals of Violette Szabo, the SOE operative who was tortured and killed by the Nazis, are to be sold by her daughter. The collection which includes the George Cross is expected to realise in the region of £300,000.

DEPORTATION: Bertie Kidd, an eighty-two year old Australian criminal, is to be deported to the UK on completion of his seventeen year sentence for burglaries carried out in the 1990s. He left Britain as a teenager.

DEPOSIT PROTECTION: The Bank of England has announced that the level of deposits protected under the Financial Services Compensation Scheme will drop from £85,000 to £75,000 at the beginning of next year. That is because the level is set at €100,000 and the euro has declined against the pound.

MARKSMAN CLEARED: Anthony Long, a firearms officer with the Metropolitan police, was cleared at the Old Bailey of the murder of a robbery suspect in 2005.

FRACKING: Third Energy has applied to North Yorkshire county council for permission to carry out fracking at a well near Kirby. Support for fracking is much stronger in Yorkshire than in Lancashire, where an application by Cuadrilla was recently rejected. The Bowland shale bed, which contains about 1,300 trillion cubic feet of shale gas, runs under both counties.

LIGHTENING STRIKE: Two walkers have been killed in separate lightning strikes in separate incidents  in the Brecon Beacons. Two other men sustained injuries.

LABOUR LEADERSHIP: The union Unite is backing Mr Corbyn for leadership of the Labour party. Mr Corbyn also has the nomination of a number of other unions.

ROYAL CHRISTENING: Princess Charlotte was christened on Sunday at Sandringham in the presence of the Queen and Prince Philip. There were five godparents.

FEMALE GENERAL: Susan Ridge, the new director general of the Army legal services, will be promoted to major general when she takes up her appointment. This will make her the highest ranking woman in the army.

ILLEGAL SUBSIDY: Austria has lodged a claim with the European Court of Justice against the approval by the European Commission of the government’s plan to pay EDF double the market price for electricity from Hinkley Point C power station. The claim is on the basis that this amounts to illegal state aid.

FUEL BILLS: A report by the Competition in Markets Authority suggests a maximum price for electricity for households on that standard tariff.

TOP GEAR: It is understood that an exclusivity clause in their BBC contract will prevent Jeremy Clarkson, James May and Richard Hammond from presenting a motoring show on any British television channel for two years. It is believed that the restriction may not affect online services.