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Campaigners: Radical reform needed to tax system

The campaign group behind new research that suggests poorer households pay almost half of their income in tax, has called for radical reform to the "pernicious" tax system.

The campaign group's chief executive Jonathan Isaby said:

This analysis shows how pernicious our tax burden has become. Not only does the tax system hit the poorest hardest, but those at the top are already contributing far more than anybody could reasonably describe as their 'fair share'.

Our tax system is neither progressive nor fair, and we need radical reform as well as necessary savings if the way we tax and spend is to become fit for purpose.

– Jonathan Isaby , Taxpayers' Alliance.

British Gas customers get early warm home discount

Credit: Rui Vieira/PA Wire/

Most British Gas customers have received their warm home discounts a month earlier than last year, according to the energy supplier. The firm said over half a million of its most vulnerable customers have received their £140 credit in time for the festive season.

This is 130,000 more than last year's figure.

The warm home discount was introduced by the Government and is delivered by energy suppliers to help those most in need such as pensioners on low incomes.

In total, British Gas expects to pay 600,000 of its customers a total of #84 million through the scheme this financial year.

Stephen Beynon, managing director of residential energy at British Gas, said:

No one should be left in the cold during the winter months, especially at Christmas. That's why we've worked hard to deliver the majority of the warm home discount before the holiday period, and give our customers who are most in need £140 to help with their energy bills.

We do a lot to help people who are struggling with their energy bills and last year we spent more than £380 million helping our elderly, disabled and most in need customers. Anyone who's worried about rising costs can - and should - contact their energy provider or a relevant charity to discuss the help available.

– Stephen Beynon,

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Poor households 'pay 47% of income in tax'

Credit: Nick Ansell/PA Wire

The poorest 10% of households pay almost half of their gross income in tax, analysis by a campaign group has claimed.

The TaxPayers' Alliance research found that direct and indirect taxes accounted for an average 47% of the gross income of the poorest 10% of households, with VAT accounting for the biggest share of the bill.

The analysis of Office for National Statistics figures showed that the average gross income, including benefits, in the group was £9,743 but after tax the figure was £5,132.

The figures for 2012/13 showed that for the poorest 10%, some 13.9% of their gross income went on VAT, 7.2% on council tax and 5.6% on alcohol or tobacco duties.

The top 10% of households paid an average 35% of their gross income in taxes, some £37,287 a year, with income tax accounting for 19.1% of the money paid to the Exchequer.

Treasury to sell of remaining Lloyds Bank stake

The Treasury will begin to sell off part of its remaining stake in Lloyds Banking Group within days, according a plan launched by Chancellor George Osborne.

ITV News Business Editor Joel Hills reports:

'No surprise' Co-op Bank failed stress test, chief says

Co-operative Bank chief executive Niall Booker said it was "no surprise" that the bank failed the stress test as it is in the early stages of its turnaround plan.

The bank is much stronger than a year ago.

As the regulator notes today, we have achieved the target of building our capital base and the actions we have taken during the first year of our business plan have made the bank more secure for the benefit of all stakeholders.

– Co-operative Bank chief executive Niall Booker

Lloyds and RBS narrowly pass bank stress test

Lloyds Banking Group and Royal Bank of Scotland have narrowly passed a Bank of England test to see how lenders would cope with severe economic stress.

Lloyds Banking Group and Royal Bank of Scotland have narrowly passed a Bank of England stress test . Credit: PA Wire composite

The test, using the position of banks and building societies at the end of 2013, found both RBS and Lloyds would be susceptible to such a crisis.

However, improvements and changes to their plans this year meant only the Co-op was required to submit a new plan.

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Co-operative Bank fails Bank of England stress test

The Co-operative Bank has been ordered to shore up its balance sheet by axing £5.5 billion in loans after it failed a Bank of England stress test.

The Co-operative Bank has failed a Bank of England stress test. Credit: PA Wire

The Bank found that a severe downturn with house prices plunging 35% would wipe out the Co-op's capital because of the effect on its risky commercial property and sub-prime home loans.

Falling petrol prices and food price war 'keep inflation low'

Falling petrol prices and the supermarket price war are expected to have helped inflation drop lower in November, giving the general public a much-needed helping hand with the cost of living.

Economy experts expect the Consumer Price Index to slump back to its five-year low of 1.2 per cent, down from 1.3 per cent in October.

And with the Bank of England predicting the index will fall below one per cent in the coming months, borrowers can expect another boost as it means the Bank may well keep historically-low interest rates at 0.5 per cent.

Pensioner bonds will 'sell like hotcakes'

A leading London stockbrokers says the Government's new bonds for pensioners will "sell like hotcakes" because the rates offered are better than the rest of the market.

Hargreaves Lansdown stockbrokers said the bonds beat the current rates available on the open market of 1.85% for a one-year bond and 2.5% for a three-year bond.

The company also said that the high rates would mean the scheme will probably cost the Government more than £300 million.

Chartered financial planner Danny Cox said:

I expect these bonds to sell like hotcakes and would be surprised to see any left on the shelves after a few weeks. After using your cash ISA subscription these bonds should be close behind on the cash saver's shopping list.

There is of course a cost to the taxpayer from this government largesse, estimated in the Budget to be in excess of £300 million. Some will think this is a small price to pay to give something back to the pensioner community, after loose monetary policy has devastated their fixed income streams.

– Danny Cox, Hargreaves Lansdown
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