Rise in Income Tax for Top Earners

Alistair darling has announced that his pre-budget report will include plans to increase Income tax for the highest earners.

Under the plans , the income tax rate will be 45% for earnings over 150, 000 pounds a year, provided labour win the next election.

These plans have broken New Labour promise of not raising the basic or top rate of income tax .

He stressed this would raise only a small amount of money needed to sort out public finances. It is esimated that this plan will raise 1.2 billion pounds.

The Taxpayers' Alliance described the move as "a totally backward step".

bUT WILL THE PLANS SCARE OFF INVESTORS??

Plans to cut VAT

Thare have been suggestions that VAT maybe cut from 17.5% to 15%.

Alistair Darlings plan will be announced on Monday. These will also include tax cuts targeted at poorer people and increased spending.

The BBC's political correspondent Jo Coburn said the VAT will benefit a larger range of people than the tax cuts would. She also added: the government's priority was to get "any extra money in people's pockets as quickly as possible and to get them out there spending that money and so boosting the economy".

Alistair Darling will tell the House of Commons that the plans will leave Britain 100bn in debt. Yet he insists "If we do not act now, the downturn will be longer and more severe," he says in the article.

Government adviser warns: Welfare plan 'may cause poverty'

He said the government should rethink plans on sending the log-term unemployed, lone parents and the disabled to work.

He warned this could cause poverty as a result of rising unemployment.

From next week, people are expected to find work once their youngest child is a least 12 years old or they will see their benefits cut.

Sir Richard, who is head of the social security advisory committee, said the so-called "welfare to work" reforms risked "falling into disrepute".

From monday, those with children over 12 will no longer be able to claim income support. However they can claim job seeker allowance instead.
He has called for the change to be delayed for a year or two.

Tories say they can't match Labours spending plans

Cameron has said he want to "set a new path" and wants build a "low tax, low debt economy for the long term".

The Conservatives are dropping their pledge to match Labour's spending plans for 2010/11.

He accused Prime Minister Gordon Brown of planning to "throw money at the crisis in the faint hope that this will help recovery".

He warned that Gordies "fiscal stimulus" would lead to higher taxes in the long run - he said a £30bn injection to the economy would mean an 8% rise in income tax later.

Could be possible tax cut

Gordon Brown has said he will do everything he can to see if cuts in taxes can be made.

This has come after David Cameron announced plans for tax cuts to keep people in work. And the lib dems have said they would offer tax cuts to lower paid people.

When asked on GMTV would had been done to help struggling familied,Gordon said petrol duty had been frozen and people where getting 120 pounds back from income tax due to the 10p tax row,.

He also added "Of course we are going to look at everything but that's a matter for the Budget and the pre-Budget report. "

The former chancellor also said he was expecting food prices to come down as a reult of a better wheat harvest and petrol prices are already falling.

When asked about about banks and interest rates he said "You can't cut interest rates and see no benefit to people - that's not acceptable, particularly when you are trying to help the banks - like Northern Rock - through difficult times."

HBOS board rejects the two former chiefs advice

The two former chiefs want to keep the bank independant as they argued that it would protect jobs and bring benifits to customers and shareholders.

The government has already spent £17bn of taxpayers' money bailing out HBOS.

HBOS said thier plan offered the shareholders no value and that merger plans with Lyolds TSB were on track.

Gordon Brown has given his backing for the takeover.

Gordon glad Banks have cut their rates

Lenders have agreed to pass on the full cut in interest rates by the bank of England. Halifax and Nationwide have cut their rates from 4.5% to 3%.

Gordon denied having to put pressure on banks to cut their lending rates.

World leaders are to meet in the US to dicuss the economic crisis.

He also repeated his idea for a "early warning system" to prevent future banking crises.