Gordon got a pretty unkind press in yesterday's Sunday Times.

British Prime Minister Gordon Brown got pretty unkind press in yesterday's Sunday Times.
‘Lifeless Gordon Brown’ barbs expose No10 infighting'. One complaint is that
Mr Brown uses obscene language to civil servants and they are not happy
about it. That does not square with his image as a man of the "Manse".

Apparently, his adviser Stephen Carter wants Gordon to change his public speaking
style because it is so boring. I know when Margaret Thatcher became prime minister
she received a lot of coaching to make her less shrill and perhaps Gordon will
benefit from a similar process.

Gordon Brown is to highlight Labour values at Scottish conference.

Taking the fight to the Scottish Nationalist Party (SNP), British Prime Minister Gordon Brown is to highlight the benefit of Labour values at
a conference in Aviemore. These values will help Scotland thrive in a globalised
world. Yet in London the Labour administration justify the increased public expenditure in Scotland as due to need.

I wonder what values are these? One I suppose is the continuation of Labour rule in Scotland and it must be very upsetting to have the
SNP in control by one seat. Another one is that Labour values were betrayed by
Tony Blair. Sorry that was a joke. One value to be protected is support of the Union and the continued presence of Scottish Labour MPs at Westminster.

Meanwhile, with constitutional change in the air the SNP is having its conversation with the people while attacking Labour as being controlled from London.

Does Mervyn King want to support UK banks?

Does Mervyn King want to support UK banks? I don't get the impression he does.
Following the internal audit by the Financial Services Authority (FSA) on the
Northern Rock affair, it transpires that the regulatory body had the impression that the Bank of England would intervene in the interbank market at the crucial time.
The central bank decided not to and Northern Rock found itself bust. As a former
shareholder in the Newcastle-based bank I did not mind taking the hit on the
shares when I sold but I wished the Bank of England had been a bit more proactive
like the European Central Bank (ECB) and the U.S Federal Reserve.

Yesterday, the Bank of England governor was waffling on about hubris. Mervyn King
wants the bankers to pay for their mistakes but this probably will not happen so as
to protect the banking system. He is probably annoyed as the rest of us over Barclays Bank paying one of its staff £21m. However, it is unlikely this will
take place next year.

Simplification of the (British) tax system remains a distant goal.

The St Albans accountants Gilberts considers that UK Chancellor Alistair Darling wants to see a simplification of the tax system but it remains a distant goal.
The HMRC issued 107 Budget Notes, which detailed changes.
If you need a local accountant to guide you through the changes, you can look at
www.searchaccountant.co.uk.
Gilberts says the new regime on income shifting at family companies to counter a reduction in tax will take place in 2009 rather than this year as
originally proposed.

Gordon Brown seems to be assailed on all sides.

British Prime Minister Gordon Brown seems to be assailed on all sides. The press reports that some Labour MPs are getting agitated at the prospect of losing their seats. Apparently, former Home Secretary Charles Clarke has helpfully circulated a list of possible losses. I suppose there has been a gnashing of teeth that Gordon
did not go for a general election in the autumn of 2007.

Then, there is the own goal of not allowing a free vote for the Embryology Bill. If the Prime Minister had allowed one, the legislation would have gone through and Gordon would not have had the possibility of cabinet ministers resigning over the
issue.

There is also concern about future bloodletting amongst Gordon's long-term aides.
There does not seem to be a sense of the Prime Minister trying to manage the
process humanely.

The Alistair Darling budget (part two)

I suppose the Alistair Darling budget has already been blown away with events. Previously, the UK Chancellor made a call for
old-fashioned banking and Northern Rock hit problems. Now, the U.S Federal Reserve
and J.P Morgan have had to rescue Bear Stearns. Perhaps, we should wonder how Darling would cope if more British banks hit problems. There is always the nationalisation option, although Gordon Brown must be wondering if the private sector solution to Northern Rock would have acted as a better precedent. Capacity
could have been taken out of the market, which would have hopefully led to
higher profits and capital generation.

If British banks cannot lend and therefore support the economy, they should carry out rights issues to raise new capital. The bank bosses don't want to do this since
they would lose their jobs but they might have no choice. HBOS has raised £750m at quite a high interest rate but this is quite a paltry sum given the size of the
UK mortgage bank.

Daily Telegraph columnist says Darling budget will be blown away.

The Daily Telegraph columnist Ambrose Evans-Pritchard has warned that yesterday's
budget by UK Chancellor Alistair Darling will be blown away. The columnist notes that
while the Federal Reserve is trying to rescue the mortgage industry in the United States, Darling is predicting 2 pct growth in the British economy during 2008.
However, Evans-Pritchard says that the UK chancellor has little room to manoeuvre
given the gathering storm clouds. The budget deficit is at 3 pct of GDP while Germany is running a balance.

I think economically things could be tasty this year but there is no point in talking up a recession. We should try and muddle through. The key market is housing
and if this stays the same or goes slightly up, we could get close to the 2 pct
growth forecast. However, if we benefitted from global growth in the past, we are
probably defenceless against a global downturn, although the pound is certainly taking the strain with a sharp fall against the euro. Anyway if you need a UK accountant, you can go to www.searchaccountant.co.uk

Evans-Pritchard also notes other global strains and stresses. Italy has posted a negative quarter while the housing bubbles have burst in Spain and Ireland.
Japanese multinationals have been affected by the problems in the US market.

St Albans firm Gilberts publishes Spring newsletter.

The St Albans accountancy firm Gilberts has published its Spring newsletter, which
which highlights various United Kingdom tax changes. For instance, with capital gains tax, the government is ending taper relief, which was originally brought in
by Gordon Brown. Gilberts can advise on strategies for capital gains tax (CGT).
The Labour administration wants to raise more tax from small companies. As previously announced corporation tax is to be raised by 1 percentage point to
21 pct from April 2008 on profits of up to £300,000. In addition, the government is to crack down on income shifting. This follows the Arctic Systems tax case, which HMRC lost but has not stopped it from fighting back.
Gilberts just discusses the changes neutrally. I have added words such as Gordon Brown, Labour and HMRC.

I am not looking forward to Darling's first budget.

I am not looking forward to Alistair Darling's first budget on Wednesday. I hope my
small car is not viewed as a gas guzzler and avoid attracting increased duty.
Apparently, the UK Chancellor needs more of our money and especially that of foreigners. This has stirred a real hornets nest. The City of London is basically
like Wimbledon. We hold the tournament but foreigners go and win it. Our domestic
institutions such as Kleinworts, Smiths and Warburgs sold out long ago.
I read today Anatole Kaletsky's column in the Times, which said that Gordon Brown decided to support the HMRC, which has long wanted to adjust the tax regime for
non-doms. This contrasts with the Treasury, which wanted to leave well alone.
Kaletsky is predicting some kind of climbdown on Wednesday.

TaxAssist Accountants highlights forthcoming tax changes.

TaxAssist is highlighting the forthcoming
UK tax changes such as the elimination of the 10 per cent starting income tax rate. The company notes that this will increase the tax charge for lower
incomes.
On capital gains there will be winners and losers. Although there will be a
rate of 18 per cent, indexation and taper relief will be eliminated from the 2008-09
tax year.
TaxAssist Accountants is an accountancy network, which looks after 24,000 customers. They range from personal individuals, sole traders and limited
companies.
The network notes that HM Revenue and Customs are getting tougher on family-owned companies, which will not be able to allocate profits and dividends amongst family members just to save tax.

Are UK interest rates too high at 5.25 pct?

Are British interest rates too high at 5.25 percent? They do not seem to be
supporting the pound against the euro, which seems to be on its way to 80 pence.
It just makes that French holiday gite much more expensive this summer.
Obviously, the Bank of England is concerned about inflation but lower interest
rates are needed to revive the UK economy. House prices are going down not helped
by lenders tightening their criteria for loans. It looks like the 100 pct mortgage
loan is disappearing fast, which will not help first-time buyers, who are crucial
for the housing market.
The European Central Bank is maintaining rates at 4 percent but expects higher
inflation due to energy prices. Inflation for 2008 should be between 2.6 percent
and 3.2 percent.