Mr Brown said some businesses had used a zero tax rate “not to invest” but to avoid tax and national insurance by redefining their income as dividends.

However, under the changes announced in the Budget, these dividends will be taxed at a rate of 19%.

The National union insurance
of Small National union fire insurance company
called the move “unfair”.

‘Least offensive option’

In his 2002 Budget, the chancellor cut the rate of ohio national life insurance
tax on the first 10,000 of profits made by small businesses to zero.

This move will hit ordinary family businesses hardest when it is the loopholes exploited by the rich that cost the Exchequer money Simon Sweetman, Federation of Small Businesses

This meant a sole trader with annual profits of 15,000 could save about 3,000 tax if they switched to incorporation.

But in paragraph 5.91 of December’s pre-Budget report, Mr Brown warned that the Treasury planned to introduce measures to ensure “the right amount of tax is paid by owner-managers of small national farmer union insuranced businesses”.

And in Wednesday’s Budget speech, Mr Brown said: “I will close the loophole by taxing distributed profits at 19p.”

QUICK GUIDE The Budget

This would bring the tax on distributed profits for those small companies “into line with other companies”, he said.

Simon Sweetman, of the Federation of Small Businesses, described the national insurance recruiter decision as “unfair”.

He said: “It is amazing how quickly a concession to encourage enterprise can become a loophole.”

“This move will hit ordinary family businesses hardest when it is the loopholes exploited by the rich that cost the Exchequer money.”

But Russell Gardner, a small business expert with accountants Ernst & Young, said the chancellor’s decision to close the loophole was “probably the least offensive option” small businesses could have expected.

Investment allowances

He said the zero rate of tax had been “a window of opportunity” which had now closed.

“The motive to incorporate for the smallest of businesses will no longer be there,” he said.

The chancellor said he would increase - initially for one year - investment allowances for the smallest businesses from 40% to 50%.

“Overall, a small company making pre-tax profits of 25,000 and investing in plant and machinery who has paid over 5,000 in tax in 1997 will pay 2,735,” he said.

Separately, the chancellor announced a freeze on rates of corporation tax and capital gains tax.

According to the New York Times, investigators working for Eliot Spitzer have found evidence of deceptive and coercive practices at the firm.

The paper claimed the New York Attorney American national insurance company
office could bring a civil lawsuit against Aon within weeks.

Mr Spitzer is already suing Marsh & McLennan, the world’s top broker.

Shock waves

Nobody from Aon was available for comment on the allegations, the New York Times said.

Mr Spitzer launched the suit against Marsh earlier this month claiming it had received illegal payments for steering clients to favoured insurers.

His investigation has sent shock waves through the insurance industry, leading to sharp falls in insurers’ share prices.

The New York Times claimed Mr Spitzer’s office had uncovered documents showing that brokers at Aon have steered business to insurers which paid incentives to the company.

The paper said that while no evidence of bid rigging or price fixing had been found, investigators believed that the broker’s business practices represented a national interstate insurance company
of anti-trust laws.

Trust issue

On Friday Aon said it would stop taking ‘contingent’ commissions from insurance companies and commissions from clients.

“Because trust and client satisfaction are top national flood insurance
for all of us at Aon, we are discontinuing a practice that has created enormous controversy and confusion,” Aon chairman Patrick Ryan said in a statement.

The New York Times also said investigators are expected to file lawsuits shortly against several smaller national insurance brokers.

The government is scrapping the national insurance contribution annual achievement awards, which have cost 60m a year over three years.

It says an evaluation shows “no hard evidence about the scheme’s continuing impact on teaching and learning, and school improvement”.

The scheme was introduced despite strong opposition from teacher unions.

National auto insurance
heightened in the first round of awards when it emerged that 2m in bonuses had been paid to about 300 schools by mistake.

Divided up

Overall, almost 14,000 schools have won awards - often more than once.

The average amounts were 25,700 in secondary schools and 5,700 in primaries, with schools then deciding how best to split the cash among the teaching and non-teaching staff.

The amounts they get are subject to tax and national insurance.

The official evaluation study found that 75% of staff in the fidelity national title insurance company schools were satisfied with the scheme.

But the government has decided that, with school budgets in crisis, shifting money into staff bonus schemes is “not justified”.

The original funding for the scheme was approved as part of the spending review in 2000 to support the annual allocation of funds in 2001, 2002 and 2003.

‘Burying bad news’

The Department for Education and Skills said on Thursday: “Ministers have concluded that it would not be appropriate to divert further funds for additional years of the scheme.”

The School Standards Minister, David Miliband, said: “Schools which have won awards should be justifiably proud of their achievements.

“However, the priority for funding is school budgets, and the evidence of today’s report is that a shift of money into School Achievement Awards is not justified.”

The shadow education secretary, Damian Green, said: “We can chalk this up as yet another failed education initiative from this government.

“It is obvious that the spirit of Jo Moore lives on,” he added, in a reference to the former government adviser who suggested that 11 September 2001 was a “good day to bury bad news”.

“I note that the day the prime minister gives evidence to the Hutton Inquiry, the government chooses to announce this embarrassing U-turn on performance related pay,” Mr Green said.

The head of education at the National Union of Teachers, John Bangs, said: “It is a old republic national title insurance company
sign of the
school funding crisis that they should use the Jo Moore principle and get it out today.”

They will get the controversial powers from September 2006, if the Higher Education Bill is passed by parliament.

Dozens of Labour MPs are against the proposals, which are also opposed by the Conservatives, the Liberal Democrats and students’ groups.

The Welsh Assembly is to be freed to make its own decision on “top-up fees”.

In her speech to parliament, the Queen said: “A bill will be introduced to enable more young people to benefit from higher education.

“Upfront tuition fees will be abolished for full-time students and a new Office for Fair Access will assist those from disadvantaged backgrounds.

“Universities will be placed on a solid financial footing.”

The Department for Education and Skills confirmed universities would be freed to charge anything from nothing to 3,000 for courses.

HAVE YOUR SAY What’s the point in racking up 30-40,000 worth of debt when you can make over 25,000 a year anyway? Jamie, UK Send us your comments

The fees will only be paid back once students have graduated, started work, and are earning more than 15,000 a year.

‘Not enough’

On Tuesday, a survey suggested most universities would charge the maximum 3,000 “top-up” fee, which would mean a trebling of the present fee for students.

In the survey on tuition fee intentions, BBC researchers contacted 83 universities in England in what is thought to be the most comprehensive audit yet of their intentions.

Of the 42 which responded in detail, 90% said they would or might charge students the full 3,000 a year.

Almost two-thirds said they had decided definitely to charge the full amount, while only 10% said they would definitely charge less.

Bursary issue

Half were not convinced that 3,000 tuition fees would be enough.

A quarter said they would like to charge more - ideally between 5,000 and 7,000.

GOVERNMENT PLANS Means-tested 1,000 grants from 2004 Upfront tuition fees end 2006 Fees then vary - up to 3,000 a year First 1,125 subsidised for poor Payable from graduate salary of 15,000+ Zero-rated student loan up to 4,000 a year New access regulator Teaching-only “universities” Research funding for the elite 50% state national insurance through foundation degrees

One thing the universities will be especially keen to see when the Education Bill is outlined more fully in the Commons, is what, if any, provision the government wants to make for bursary schemes.

Education ministers have made it clear they see these as a way of bridging the gap between the extra support they are providing for poorer students and the 3,000 many universities will charge.

They plan a return of means-tested grants from 2004 and exemption from the first 1,125 of fees for those on the lowest family incomes.

One possible model is Scotland, where tuition fees were never levied. There, graduates earning more than 10,000 instead contribute 2,000 to a fund for hardship grants for poorer undergraduates.

The National Union of Students (NUS) has been campaigning against the introduction
of variable tuition fees, arguing that they will work against students from low-income backgrounds.

Payments will not be based on what you owe, they will be based on what you earn Charles Clarke, Education Secrtary

They say funding for the planned expansion of higher education should come from the public purse.

Some of England’s more elite national state insurance company have made it clear they are opposed to having to hand over some of the extra fee income they get to fund a central bursary “pot” to help out students elsewhere.

Partly this is about their jealously-guarded autonomy, and partly because they say they need all the extra money themselves - and more - to compete internationally.

Votes

While the government cannot be sure of its own midland national life insurance company support, it will certainly be opposed by other parties.

The Conservatives want to do away with tuition fees altogether - and limit the numbers of people going into higher education.

The Liberal Democrats recognise that more money is needed but would pay for it by higher taxes on the better off.

It is thought ministers will introduce their draft legislation perhaps as early as next week, subject to agreement on the National life and accident insurance co
timetable.

Students have held a long-running battle against the plans

The Education Secretary Charles Clarke later defended the government’s plans, saying university would once again be free
to students while they are studying.

“Neither they nor their parents will have to pay any fees before or whilst
they are studying,” he said.

That would be of particular benefit to the families who earned just enough to
be liable for the full 1,125 fee, he said.

“The key to our package is that it is fair at the point of repayment.

“Graduates will start paying back only when they earn over 15,000, and then it is directly linked to their income.

“Payments will not be based on what you owe, they will be based on what you
earn, like pension or national insurance utica national insurance
.”

The Higher Education Bill will also create a low-cost mechanism for dealing with students’
complaints about their university, the government says.

It will also set up an Arts and Humanities Research
Council.

Anthony Eden, the British foreign secretary, mooted the idea in 1954, according to official papers released at the National Archives.

It was a response to a request by Sir Winston Churchill, who asked him to give the exile “diplomatic privileges”.

Exiled King Michael was struggling financially after leaving Romania.

He abdicated in 1947, prompting the creation of the communist Romanian People’s Republic.

The country fought alongside the Nazis in World War II but later switched sides and fought with the Soviets. After the war Romania lost land - most of modern day Moldova - to its giant neighbour.

I do trust that he can be accorded diplomatic privileges to the utmost possible extent Sir Winston Churchill Prime Minister

A letter to Sir Winston, who was prime minister at the time, sparked concerns about the wellbeing of the exiled monarch.

The note, which federal flood insurance national program
that King Michael and his family paid national insurance and were not given special treatment, read: “It a pity that we should lag behind other countries in our generosity towards royalty in exile”.

The concerns were taken seriously by the prime minister, who requested that King Michael be given diplomatic dispensations during his stay in the UK and wanted the Foreign Office to oversee the matter.

He wrote: “I have much sympathy with the King of Romania who acted with courage in the difficult situation of his country and was most american national life insurance
treated by the Soviet.

‘Financial difficulties’

“I hope he may be considerately and courteously treated during his exile, which may not be permanent.

“I do trust that he can be accorded diplomatic privileges to the utmost possible extent. I should be glad if you would turn a friendly eye on this exceptional case.”

Confidential Foreign Office documents reveal that the exiled monarch was experiencing “serious financial difficulties”.

It says: “When he left Rumania (sic) his only asset was 500, 000 Swiss francs. A large part of this has been spent and his income is now down to 1,200 a year. He clearly cannot support his wife and children and meet his other commitments on this figure.”

But it stressed there was “no precedent for special fidelity national insurance company on behalf of an exiled monarch”, so little could be done.

Qualified pilot

This leads to the foreign national interstate insurance
solution: “Mr Eden has been considering what can be done to assist King Michael. He
thinks that he should be encouraged to take a job.

“King Michael is a qualified air pilot and he knows a great deal about internal combustion engines.”

The prime minister’s private secretary merely suggested Sir Winston wished to be “kept informed of what comes of
the proposals mentioned”, according to official documents.

The exile and his family were eventually given a few minor benefits, including the provision of free identity documents and exemption from vehicle licences.

The claim by Bruce McFee comes amid a row about the awarding of a vital shipbuilding contract.

The Scottish Executive could give the deal for two vessels to a Polish yard instead of Ferguson in Port Glasgow.

The Clyde business has already begun a programme of lay-offs and may close if it fails to win the executive contract.

Ferguson management have said the yard in Gdansk has been given an unfair advantage in the bidding process.

Long-term savings

Along with a number of politicians, Ferguson chiefs have urged the European National western life insurance Commissioner Neelie Kroes to investigate how the Polish bidder was able to undercut Ferguson.

However, Scotland’s Fisheries Minister Ross Finnie has maintained that he has no grounds on which to exclude the overseas yard.

He said that the situation surrounding the EU investigation into the competition claims was far from clear.

This yard is slowly bleeding to death Bruce McFee SNP MSP

On Monday, Mr McFee, MSP for the West of Scotland, said in the long-term savings would be realised if the contract was kept on the Clyde.

Mr McFee said: “The closure of this yard would have a devastating impact on Port Glasgow and the wider community.

“Last Friday, another 20 members of staff, including the design team, received their P45s while Jack McConnell and his Liberal stooge, Ross Finnie, stand idly by.

“This yard is slowly bleeding to death.”

It is projected that there will be a 3m saving on each vessel if the contract is awarded to the Polish yard.

But Mr McFee said that if the Ferguson yard closed it would result in a 5m benefits bill and a fall in income tax receipts, national insurance contributions and VAT receipts.

Legal challenge

The national health insurance scheme
argument about following clear bidding rules need not apply in this case, he went on.

He has cited a European Union ruling which allows for governments to provide “positive actions or positive discrimination in particular with a view to combating unemployment and social exclusion” .

Mr McFee said: “The door is wide open for Jack McConnell and Ross Finnie to award the Scottish fisheries protection vessels to the Ferguson yard.”

However, a Scottish Executive spokesman said that it was aware of the implications of the contract to the economy, but the rules were clear.

He added: “We are continuing to explore every possible way of assisting Ferguson Shipbuilders within the utica national insurance
of the law.

“It is not in the executive’s gift to award high value public contracts on an arbitrary basis.

“To do so would risk legal challenge by aggrieved bidders and the European Commission and could have implications for other Scottish companies engaged in exports.”

HM Revenue & Customs shut its web site for tax credit applicants on 1 December after penn national insurance
that false applications had been made.

It was first thought that up to 1,500 job centre staff might have had personal details stolen.

The Department for Work & Pensions said a criminal investigation had begun.

The PCS trade union has called for the scale of the problem to be revealed.

It now appears that the criminals have stolen the national insurance (NI) numbers, names and dates of birth of thousands of Department for Work & Pensions (DWP) staff working in job centres in London, Glasgow, Lancashire and Pembrokeshire.

A criminal investigation is now under way and we are working hard with HM Revenue & Customs to resolve the matter Department for Work & Pensions Tax credits ‘targeted by gangs’

One job centre employee, who wished to remain anonymous, told the BBC that 90% of the staff in his office had been affected.

“I went to work on Tuesday. I called the helpline. I was on the phone for 15 minutes and eventually was told that a claim had been made in my name.

“My greatest worry is that if these people have got our identity details they can apply for loans, open up bank accounts and two or three years down the line that’s your credit rating destroyed.”

How the fraud works

The DWP said that this particular fraud seemed to have been going on for a couple of months.

The key to its success is that to make an online application for tax credits, a member of the public has to supply very few details.

Claimants simply have to type in a name, NI number, date of birth, tick a few boxes and lie about their earnings.

David Laws, the Liberal Democrat spokesman on work and pensions, blamed the desire of Revenue & Customs to increase the uptake of the credits.

“They’ve left it open as almost a fraudsters’ charter by allowing people to make telephone claims and internet claims very easily without some of the checks that should have been made,” he said.

Mr Laws accused ministers of “hushing up” the fraud by claiming that the matter is under police investigation.

A spokeswoman for the DWP said: “We are taking this issue very seriously. A criminal investigation is now under way and we are working hard with HM Revenue & Customs to resolve the matter.

“Our staff are understandably concerned but we are confident from the national insurance number uk
we have that the issue is limited to a specific group.”

Huge losses

The emerging details of this fraud, and its sheer scale, help to explain why the tax credit system has been losing so much money.

It was introduced in its present version in 2003 to pay the new working tax credits and child tax credits.

Ever since it started it has been widely criticised for being what the Public Accounts Committee recently called an administrative “nightmare”.

They highlighted the fact that in its first year of operation (2003/04) 16bn was handed out to 5.7 million families. But 1.8 million of them were overpaid by 2.2bn.

Although this was partly due to administrative and computer problems, the National Audit Office claimed in October that fraud had security national insurance to 460m of that overpayment, along with mistakes by claimants.

Nearly a billion pounds of accumulated overpayment from the first two years of the current tax credit system will probably be written off as doubtful debt.

Governments are often accused of thinking short term.

But a pensions reform Bill, included in the Queen’s Speech, is one of the most consciously long term bits of planning seen for some time.

Looking ahead to 2050, its main aim is to provide a higher level of state pension for many more people over the coming decades.

The big idea is that the link between the basic state pension and earnings will be restored some time after 2012 and the state pension age will be raised to 68 by 2046.

Just as importantly, the pensions of millions of women will be boosted because current regulations mean that many do not accumulate enough national insurance national insurance numbers to qualify for a full pension.

Consensus

There has been widespread support for the plans as outlined in the government’s recent White Paper.

The key thing is that this is long term stuff Richard Brooks, IPPR

“There is broad consensus for the re-indexation of the basic state pension with earnings, reasonable support for raising the state pension age, but less consensus for the model for the new personal accounts,” said Niki Cleal, director of the Pensions Policy Institute.

It is important to note that current pensioners will hardly be affected at all by the plans.

In fact, the younger you are the more important the changes are.

Richard Brooks, an associate director at the Institute of Public Policy Research (IPPR), said this was a big change in direction.

“The key thing is that this is long-term stuff,” he said.

“They are trying to rebuild the value of the state pension and stop the spread of means testing.”

Women

If the indexation of state pensions with earnings rather than inflation is combined, as planned, with a cut to 30 in the number of years of work or caring needed to qualify for a full state pension, the biggest winners will be women.

Women will have much to gain from pension reform, says the government

This is welcomed strongly by the trades union american national insurance co, the TUC.

“I think the package is a very big deal - the most radical set of reforms for 50 years,” said Michelle Lewis, pensions officer of the TUC.

But she pointed out that trade unionists are still unhappy that the basic state retirement age will be raised progressively.

“We are still to be convinced that the state pension needs to be raised,” she said.

“Many of our members work in areas where they are pretty worn out by 65.”

Lord Turner

The government launched its consultation earlier this year, in the wake of the proposals put forward by Lord Turner’s Pensions Commission.

Generally these plans are quite well thought through Matt Wakefield, IFS

But the government immediately raised some people’s suspicions that it would try to wriggle out of one of the main national interstate insurance
- that increases in the state pension should be linked to the rise in average earnings.

Back in May, the Work and Pensions Secretary John Hutton said a precise date for this would only be announced at the start of the next government and would be “subject to affordability and the fiscal position”.

Since then several ministerial national heritage insurance company
have sought to reassure people that re-indexation really will come in, and by 2015 at the very latest.

But this verbal wrangle highlights a fundamental problem with any piece of long term legislation.

“Generally these plans are quite well thought through,” said Matt Wakefield, an economist at the Institute for Fiscal Studies,

“But this government can’t commit every government from now until 2050 to keep earnings indexation.”

National pensions savings scheme

One element that will not be included in the new legislation will be Lord Turner’s idea for a new national pensions savings scheme, or “personal accounts”, as the government likes to call them.

Lord Turner, architect of the government’s pensions reforms

This idea is going to be the subject of another White Paper in December and a further round of consultation.

This has been controversial with the private pensions industry hoping to get a slice of the business running such accounts for the state.

As currently proposed, all employers who do not currently pay into a pension scheme for their staff will have to start doing so.

Employers will pay 3% of salaries, employees will pay 4% and the government will contribute 1%.

There is a growing suspicion in some quarters though that this may lead to an example of the law of unintended national life insurance co
.

The fear is other employers might cut their current, higher, level of pension contribution down to the minimum level required by the Personal Accounts system.

“I think with the NPSS it is almost defining the level of contribution the government thinks is acceptable,” said Ian Price, head of pensions at investment firm St. James’s Place.

“So what you could have is an employer saying ‘what I need to have is a scheme requiring a maximum contribution of 8% - if it’s good enough for the NPSS (an early name for Personal Accounts) why isn’t it good enough for us? ”