The Government needs to look at its own culture of rewards and perks, specifically its own final salary pension scheme as well as those of the judiciary and civil servants.
A situation where the vast majority of people suffer from economic failure and market performance has no effect on the final salary pensions of these privileged individuals. We need to be in this situation together.
Further, to restore confidence, the Government needs to look carefully at MP's expenses, use of family members as support staff and their own secondary housing. It's all part of the unacceptable fat cat culture.
The upcoming budget from Alistair Darling will be the first that he, and indeed the entire New Labour government, has had to deliver in a time of crisis. For 11 years they have enjoyed a rich harvest and have reaped the rewards. Now, the bubble has well and truly burst and this budget can have only one true agenda - to win back the public's confidence.
An apology from Darling and Gordon Brown for helping create the crisis the country now finds itself in is a bit optimistic. A step in the right direction would be an attempt to establish confidence with the taxpayer. This can be achieved if the Government regains some resemblance of moral fortitude. And I think pensions would be a good place to start.
The Labour government has been extremely arrogant and has helped create a culture where those who are directly responsible for the crisis are being rewarded the most.
A case in point here is that if Sir Fred Goodwin. This man was one of a handful directly responsible for putting the British economy in such a dire situation and he has been given a pension that most people cannot comprehend. And, in a double whammy to taxpayers, the news came through this week that he was given a £1.8 million tax break on top of it.
With regard to possible tax changes, I don't think the Government will try anything radical. The whole issue with non-doms caused a bit of a stir last year when the proposed tax changes had them all threatening to leave the country, taking their vast wealth with them. But the storm seems to have blown over, with few actually leaving. I personally don't think these changes will make much of a difference and non-doms will continue to live here even when the tax changes take effect.
In all likelihood, Darling will realise that fixing the economy is probably beyond his power and will resort to unpopular but necessary measures to raise revenue. These will be the inevitable raising of tax on alcohol and cigarettes. The environmental issue is a hot topic at the moment and will no doubt lead to higher taxes on petrol, cars and possibly aviation as well.
As I said before, the responsibility of the economic crisis lies partly with the government for creating such a fundamentally flawed culture where those who perform the worst get paid the most, and the public is well aware of this. The government should use this opportunity to establish confidence with the public, but in truth anything they do will be too little too late.
Bruce Wilson is managing director of Helm GodfreyIFAonline
Three years at Wells Fargo
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