Chancellor: UK Has Run Out of Money 
The Chancellor, George Osborne, has admitted that the government has run out of money and cannot afford debt-fuelled tax cuts or extra spending.

Speaking ahead of next months Budget, the Chancellor has issued the stark warning that there was little the Coalition government could do to stimulate the economy and that Britain’s only hope rests with the private sector creating growth.

Mr Osborne told reporters: “The British Government has run out of money because all the money was spent in the good years.

“The money and the investment and the jobs need to come from the private sector.”

Despite coming under increasing pressure to ease his tough austerity measures, amid fears the country is set for another recession, Mr Osborne, has also added that he’d stand firm on his pledge to balance the book’s by refusing to borrow money, saying: “Any tax cut would have to be paid for. In other words there would have to be a tax rise somewhere else or a spending reduction.

“In other words what we are not going to do in this Budget is borrow more money to either increase spending or cut taxes.”

The tough words by George Osborne were also echoed by Liberal Democrat Jeremy Browne, the foreign minister, who has warned that the country faces an “accelerated decline” without measures to tackle its debt and increase competitiveness.


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Banking Sector Needs to Change 
Bank of England official Andy Haldane has said that Britain's banking industry needs sweeping changes so that it can assist small and medium sized businesses better, claiming that the industry requires more middle-sized banks which would be natural lenders to the sector.

Speaking yesterday at a business conference, Mr Haldane argued the lack of lending to smaller businesses was one of the main reasons behind Britain’s weak economy, adding that the banking sectors needs structural reconfiguration to ensure that SMEs have the financing they need to be tomorrow’s growth.

Mr Haldane added that along with the government looking to address the lack of lending to smaller firms with a loan guarantee scheme, which the finance minister George Osborne plans to present with his 2012 budget next month, longer term changes to Britain’s banking industry were needed too.

He added: “We have a small number of very large banks and a quite large number of small banks and a missing middle.

“It is the missing middle of medium-sized banks that would be the natural lenders to small businesses.”

In recent months, the government has set out on sweeping regulatory reforms of the banking sector, requiring banks to ring-fence their retails operations from riskier investment banking.

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HMRC Inspectors Receive £1.4 Million in Bonuses 
It has been revealed that HMRC inspectors have been paid more than £1.4 million in bonuses since 2008.

Currently, there are two different bonus schemes which operate for HMRC officials working in criminal investigations. One is performance related, tied to annual work; whilst the second is recognition related for staff, excluding senior civil service, which reflects exceptional in-year performance.

The official figures show that in 2008 / 09 £379,656 was paid in bonuses; followed by £435,689 and £349,168 in the two years that followed. So far in 2001 / 12, £275,326 has been paid, although the Treasury minister, David Guake, did tell MPs the final figure wouldn’t be available until the end of the current financial year.

He added: The overall value of bonuses paid to those working in criminal investigation will be dependent upon the performance of individuals across the performance year.

“Beyond 2013 we cannot provide any forecasts due to the ongoing wider civil service reward reform work.”

Priti Patel, the Conservative backbench MP whose Parliamentary Question forced the Government to disclose the figures, said of the figures disclosed: “That is an astonishing figure in light of the problems the public face across the country. It is positive that they are falling but they are still too high.

“More needs to be done to get the figures down. Bonuses still need to be justified when they are paid out by HMRC.”

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CBI Calls On Chancellor to Deliver “Plan A Plus” 
The CBI is calling on the government to give a £500 million boost to British businesses, through a series of targeted and modest cuts in the budget.

The business lobby group claims that many businesses have the potential to grow and create new job, but confidence within the public sector remains weak.

In an effort to combat this, within its submission ahead of next months budget, the CBI have urged the Chancellor, George Osborne, to deliver “Plan A Plus” to bolster growth and investment.

John Cridland, the CBI director general, said: “With our economy firmly under the international spotlight, there is no time to lose: Plan A plus must become a reality.

“We're calling on the government to make some targeted changes to the UK tax system, which could make an impact on business decisions and create new opportunities for growth."

The CBI are also calling on the government to ensure existing policies set out in the Autumn Statement, such as credit easing which was designed to make it easier for business to borrow, are fully delivered; with John Cridland adding: “The chancellor must use this Budget to score the growth and investment policy goals he put forward in his Autumn Statement.”


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Directors See High Recession Risk 
A recent survey conducted amongst business leaders has suggested that a third of company directors believe there is a high / very high risk of the UK falling into another recession this year.

The Institute of Directors’ (IoD) survey of 1,000 business leaders also found that fifty-three percent thought there was a moderate risk of recession during the year.

Forty-three percent of those surveyed by the IoD think any recession will be short and mild, whilst ten percent believe it’ll be long and deep. One key area of concern highlighted y the survey was the future of the Euro, with half of the company directors believing there is a high or very high risk of a Euro break-up this year.

Graeme Leach, chief economist at the IoD, said: “The resounding message from the survey is the critical role of confidence at this stage in the economic cycle.

“If the Euro crisis stabilises, confidence could return relatively quickly and companies could dust down business investment and recruitment plans put on hold last year.

“Alternatively, of the euro crisis gets worse, confidence is highly unlikely to return this year."

The survey supports previous findings from the National Institute of Economic and Social Research which predicts a UK recession in the first half of 2012, after the UK economy shrank by 0.2 percent in the last quarter of 2011.

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