Tax Cheats: HMRC Publishes Names and Photos

The names and photographs of last year's top tax cheats have been made public as part of the Government's efforts to crack down on evasion.

The 32 criminals have been sentenced to a combined 155 years and 10 months behind bars, HM Revenue and Customs (HMRC) said.

The move to publish their details is designed to shame tax cheats.

The Government invested £917m in tackling tax evasion, avoidance and fraud in 2011-12, with an additional £77m planned over the next two years.

"Most people play by the rules and pay what they owe, but HMRC is cracking down on those who don't," said Exchequer Secretary to the Treasury David Gauke.

"We hope that publishing these pictures will help get across that it always makes sense to declare all your income, and tax dodgers are simply storing up trouble for the future."

The Government hopes its crackdown will raise an additional £7bn each year by 2014-15.

Among those whose details were published was a criminal gang that has been jailed for one of the biggest alcohol-smuggling frauds ever uncovered in the UK.

The scam was worth £50m a year in unpaid duty and VAT, and allowed the gang members to spend vast amounts of money on luxury cars and properties throughout Europe.

The Prime Minister has made tackling tax avoidance a key issue of the UK's presidency of the G8 group, amid mounting concerns over the tax policies of big international firms in the country.

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FSA To Sweep Away New Bank Barriers

By Mark Kleinman, City Editor

The City regulator will set out proposals later this month to slash capital requirements for new banks as ministers try to ferment fresh competition to the industry's dominant players.

I have learned that the Financial Services Authority (FSA) has convened a summit on January 16 at which it will lay out plans to sweep away many of the restrictions that critics have argued have restricted the ability of new banks to get off the ground.

Among those attending the meeting will be representatives of the Treasury, the British Bankers' Association and the Association of Foreign Banks. The regulator's plans will be set out by Martin Wheatley and Andrew Bailey, the managing directors of the FSA.

According to insiders, the main proposal will be to relax the requirement for new lenders to hold comparable capital buffers to established banks during the early stages of their existence. Under current rules, new banks must significantly increase the capital they hold during their third year of operation, a measure that the FSA will propose is abolished.

Virgin Money entered the banking market as an alternative to the 'Big Four'

The existing capital regime has been criticised as excessively onerous by some executives who have attempted to launch banks in the aftermath of the financial crisis.

Only one new high street lender - Metro Bank - has opened its doors in recent times, and ministers are keen to encourage further efforts to assail the dominance of the likes of Barclays, Lloyds Banking Group and Royal Bank of Scotland.

A number of other projects, including a telephone and internet-based lender called Home & Savings Bank, have failed to see the light of day because of capital-raising difficulties.

Modernisation in 1959 included drive-in banks, like this one in Leicester

Last autumn, Mr Wheatley told the Parliamentary Commission on Banking Standards that the reformed regime for authorising new banks would achieve the Government's competition objectives.

"We are looking at a staged process where we can give new entrants enough certainty to recruit a chief executive and get capital but still reserve our position that they cannot be fully operational until the right things are in place."

The effort to remove capital obstacles to the formation of new banks comes as regulators intensify pressure on Britain's major lenders to increase the financial buffers in place to protect them in the event of a future financial crash.

The Bank of England, which will assume responsibility for regulating the banking industry this year, has warned lenders that they will need to restrict dividend and bonus payments in order to conserve capital.

The FSA, which is expected to publish its plans early next month, declined to comment on the forthcoming meeting.

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More Pensioners Working Into Retirement

By Becky Johnson, Sky News Correspondent

As nearly 10 million people in Britain are now over 65, increasing numbers of pensioners are taking up a second career after they retire.

One in three 45 to 65-year-olds now plan to carry on working into retirement, according to a report by investment group Standard Life.

Sam Almond is 86 and lives in Altrincham, Cheshire, with his wife Hazel. After he retired from his job as the owner of a manufacturing company he began writing books about the financial markets.

His success as an author spurred him on to write a self-help book, Spinach For Breakfast, about the secrets to living longer.

He believes the key to staying young is keeping busy. Every day he gets up at 4.30am to allow time to do some exercise, eat a healthy breakfast and be at his desk for 8am.

The latest census shows the number of people over the age of 65 in England and Wales has increased by 10% over the last decade.

According to the Department for Work and Pensions life expectancy for men is expected to reach 91 by the year 2050, compared with 87 today.

One reason more people over retirement age are continuing to work is to top up their income.

The National Association for Pension Funds says nine in 10 people believe the state pension will not be enough for them in retirement.

Universities Minister David Willetts told Sky News: "One thing that we've done is transform the regime for older workers by abolishing compulsory retirement ages so that companies can keep staff for longer.

"But there may some people, who've paid off the mortgage and the kids have left home, who want to make a career change.

"We notice increasingly mature students who may have had one career but who are now thinking of getting a new qualification and starting a second career.

"I believe the more people that are out there seeking work, the more jobs get created. And if you look at the record of the last two years, despite the austerity, there have been more than one million extra jobs created in the private sector so we can create the jobs as people come forward who want to do them."

Julie Kertesz, 77, took up stand-up comedy a year ago. She says it's something she fell into by accident after realising she could make people laugh.

Originally from Hungary she has lived and worked around the world, mainly as a chemist.

She retired aged 60 but says she continued to pursue her interests in writing and photography.

She then tried public speaking and has now performed her stand-up routine in more than 50 venues across the UK.

She told Sky News: "The young people who listen to me are surprised and they like it, they say I'd like my grandmother to be like that or my grandfather.

"Don't die before you die - do things and live completely, change things because that is when you live... Even at 70 or 80 you can do wonderful things."

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Google Does Not 'Fix' Searches: US Regulators

Google does not unfairly favour its own services above others in search results, according to US regulators.

The Federal Trade Commission (FTC) said it could find no evidence to back claims the search engine giant "fixed" its searches.

The 19-month investigation, which amounted to nine million pages of documents, ended in agreement that Google will change some of its practices.

The search engine has said it will stop "scraping" (using snippets of) reviews and other data from rivals' websites for its own products.

Websites will now be allowed to opt out of being "scraped" without being demoted in searches.

Google has also said it will allow greater access to its Motorola patents and will use a neutral third-party to try to resolve disputes before opting for an injunction.

These patents are deemed to be "essential" for rival mobile devices such as Apple iPhones and iPads.

However, the agreement has largely been interpreted as a mild rebuke, rather than the slap that many of the search engine's rivals had been hoping for.

Making an announcement at a news conference, the FTC chairman, Jon Leibovitz, said that Google was "unquestionably one of America's great companies".

Google patents are important for mobile devices such as iPhones

He said: "Many of Google's competitors wanted the commission to go further and regulate the intricacies of Google's search engine algorithm.

"Today, the commission has voted to close this investigation unanimously. Although some evidence suggested Google was trying to eliminate competition, Google's primary reason for changing its look and feel or algorithm was to improve search results."

Google posted a triumphant response in a blog, detailing the agreement and saying: "The conclusion is clear: Google's services are good for users and good for competition."

But Beth Wilkonon, a lawyer hired by the FTC to help steer the investigation, said: "Undoubtedly, Google took aggressive actions to gain advantage over rival search providers. However, the FTC's mission is to protect competition, and not individual competitors."

The European Commission is investigating Google over allegations of anti-competitive search practices and is due to report back later this year.

The FTC announcement came as the US State Department hit out at Google for being "unhelpful" after its executive chairman, Eric Schmidt, made a trip to North Korea.

State Department spokeswoman Victoria Nuland said: "We don't think the timing of this is particularly helpful." She said that Mr Schmidt had been made aware of US concerns about the trip.

She cited North Korea's launch of a long-range rocket in December, which raised tensions in the region.

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Mortgages: Millions 'Struggle With Payments'

By Enda Brady, Sky News Correspondent

Nearly eight million people in Britain are struggling to keep up with mortgage or rent payments each month, according to the charity Shelter.

A total of 1.4 million have already fallen behind, with almost a million people resorting to high-interest so-called 'pay day' loans to make ends meet.

"It's shocking to think that so many families will be starting the New Year with a huge weight hanging over them, trapped in a daily struggle to keep their home," said the charity's chief executive Campbell Robb.

"Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control.

"It's vital that anyone who's having difficulty paying their rent or mortgage gets advice now. Don't wait until things reach breaking point later in the year - it could leave your family's home at risk."

Mother-of-two Mandy Buxton from West Sussex found it impossible to balance the books over the past couple of years and opted to take out payday loans to get by.

It is a decision she now bitterly regrets, as she faces up to having to leave her rented property.

"I got to the point where after I had paid off the loan I had 50p left and that had to last me the month," she told Sky News.

"I realised I couldn't carry on the way I was so I had to say to my boss that I wouldn't be coming back to work because I didn't have the money to get there and back.

"If you have to take a few days off work because one of your children is ill or there is a problem it puts you in a situation where you just can't pay the bills."

But with interest rates at an historic low, how will people cope in the next few years if and when rates go back to where they were before the recession began in 2008?

Mortgage expert Paula John says many people will eventually start moving towards fixed rate mortgages.

"For hundreds of thousands of families it's only the very low mortgage rates that have been keeping the wolves from the door," she told Sky News.

"Many UK households have really been struggling over the past few years and if rates were to go up it would be a real concern.

"I think people are more financially aware now than they were a few years back and what we will see is a mass movement towards fixed rate mortgages."

Shelter say they are seeing a rise in demand for their services and point out that people are finding "there is little left of the housing safety net that was once there to help them get back on their feet".

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Rail Fares Must Not Be 'Ramped Up', MPs Warn

A rise in peak-time fares for rail passengers would just be a tax on commuters and should not be considered by the Government, a report by MPs has said.

Reducing the cost of the railways to taxpayers must not be achieved by "ramping up fares", the chairman of the House of Commons Transport Committee Louise Ellman said.

Following Sir Roy McNulty's report into rail costs, the Government is looking at a variety of measures, including managing peak-time demand by increasing fares for those travelling at the height of rush-hour.

The committee's report said: "We recommend that the Government rule out forms of demand management which would lead to even higher fares for commuters on peak-time trains."

The MPs said many lower-paid workers had no choice but to travel at peak times.

The report went on: "Higher prices at peak times might make a difference to demand at the margin but would for the most part be a tax on commuters who have no effective choice over how or when they travel."

The report also recommended that the Government should set out long-term policy on annual season ticket fare increases.

Thousands in the South East pay more than £5,000 for annual season ticket

The committee's comments come two days after inflation-busting average rises of 4.2% for regulated fares, which include season tickets, took effect for passengers.

Thousands of passengers in the South East now pay more than £5,000 for an annual season ticket.

This year's regulated fare rise would have been even higher had the Government not pulled back from the original plan of a greater increase.

The committee also said it was "very concerned" about the safety implications of proposals to reduce staffing at stations and on trains.

Launching the report today, Mrs Ellman, a Labour MP, said: "The number of rail passengers has increased but train companies' unit costs have not come down."

Bob Crow, general secretary of the RMT transport union, said: "While this report reinforces once again that our railways are nothing more than a multi-billion pound rip-off lining the pockets of a bunch of spivs and speculators, it ducks the real issue and that's the cast-iron case for public ownership."

Manuel Cortes, leader of the TSSA transport union, said: "This is the clearest warning to ministers against going down the route of rationing rail travel by pricing passengers off trains through super peak-fare tickets."

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Report: Retail Bankruptcy Increased In 2012

The number of retail firms filing for bankruptcy continues to grow, according to new research.

Business advisory firm Deloitte said the number of retailers falling into administration in 2012 increased by 6%, compared with 2011.

It said 194 retailers entered administration last year, compared with 183 in 2011 - up 18% from the 165 bankruptcies in 2010.

Deloitte restructuring services partner Lee Manning said: "These figures are a stark reminder of the difficulties which continue to face the high street.

"Constrained household budgets and the structural challenges facing the sector mean it is certain that we will see further distress this year.

"Christmas trading appears to have been reasonable, though not spectacular and not enough to prevent insolvencies in the first quarter of 2013."

Deloitte said there had been a slight fall in the number of retail administrations during the last three months of 2012 compared to the fourth quarter of 2011, with bankruptcies down to 37 from 42.

Although administration proceedings across all sectors were down 9% in 2012 to 1,883, the retail sector was also noted for a number of high profile chains being hit.

"In 2012 alone we have seen Peacocks, La Senza, Blacks, Game, Clinton Cards, JJB Sports and Comet enter administration," Mr Manning said.

"Consumer confidence remains fragile and where we have seen some respite through lower inflation, this has not translated into increased spending with many consumers preferring to pay down existing debt or save."

The outlook continues to appear bleak for the retail sector, with the move to online shopping impacting heavily on future strategy.

"There will always be a need for physical retail space but at present too many retailers have too many stores and 2013 is likely to be marked by further closure programmes, both within and outside of formal insolvency processes.

"Similarly, as an increasing proportion of retail sales move to online and mobile, retailers need to consider how their stores support sales across all channels by offering flexible delivery or collection options, becoming a product showroom and developing brand engagement and loyalty."

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US Fiscal Cliff: Markets Rally After Late Deal

Global markets have rallied in response to a deal in the United States to avert its so-called fiscal cliff.

The market boost came after US Democrats and Republicans finally agreed a deal that will stop hundreds of billions of dollars in automatic tax increases and spending cuts that risked plunging the world's biggest economy into recession.

Stocks around the world started 2013 with hefty gains as investors welcomed the vote in the House of Representatives.

London's FTSE 100 was up 2.2% at the close, after earlier busting through the 6,000-point mark for the first time since July 2011.

Key European markets were up between 2.19% to 3.81%, while in Asia Hong Kong's Hang Seng index shot up 2.9% at the close - its highest finish since June 1, 2011.

In New York, the Dow Jones Industrial Average ended 2.4% higher.

The lights of the Capitol burned late into the night as the deal went on

"Investors are trading with a sense of relief after lawmakers in Washington agreed on a compromise to avoid the fiscal cliff that has been the dominant theme in equity markets since the presidential elections back in November," Mike McCudden, head of derivatives at stockbroker Interactive Investor, said.

The fiscal cliff deal is likely to remain the focus of attention in financial markets, as US institutions open for trading.

Mr Obama welcomed the agreement and said it was just one step in a broader effort to strengthen the economy.

He said: "Thanks to the votes of Republicans and Democrats in Congress I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing tax hikes that could have sent the economy back into recession."

Some House Republicans had wanted to amend the bill to incorporate more spending cuts but dropped the idea.

Mr Obama headed to Hawaii for a break after the deal was brokered

In the end, 172 Democrats and 85 Republicans voted in favour of the bill, which marks a triumph for the president less than two months after he secured re-election while campaigning for higher taxes on the wealthy.

The legislation cleared the Senate hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell, veteran negotiators, sealed the deal.

The fiscal cliff deadline would have triggered tax increases of $536bn (£328bn) and spending cuts of $109bn (£67bn) from domestic and military programmes.

The compromise Senate deal extends the tax cuts for Americans earning under $400,000 (£246,000) - up from the $250,000 (£153,000) level that Democrats had originally sought.

But longer-term fiscal problems remain and Mr Obama will likely face more battles with the Republican-dominated House of Representatives.

"Cynics will point out that another argument has been booked in for two months' time, when the debt ceiling comes up for debate, IG market analyst Chris Beauchamp said.

"And Republicans will be looking to make progress on the spending cuts that haven't featured in the New Year deal."

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Start-Up Loans Scheme Gets £30m Boost

Thousands more young entrepreneurs could get loans to start their own businesses as the Government announces it is boosting its scheme.

Prime Minister David Cameron said funding for the coalition's Start-Up Loans scheme was being boosted by £30m to £110m over three years.

The age limit for applying was also being raised from 24 to 30 in response to what Downing Street aides said was "high demand".

Number 10 insisted the initiative was on target to issue more than 2,500 loans by March - despite criticism that only a small portion of loans had been finalised since the scheme was formally launched last autumn.

Some 3,000 people are said to have registered an interest in the money and mentoring packages, which are only available in England and being delivered through charities such as The Prince's Trust.

Those whose business plans are deemed "robust" typically receive £2,500, which can be repaid over five years at a relatively low interest rate.

"Start-Up loans are an important part of my mission to back aspiration, and all those young people who want to work hard and get on in life, so this country competes and thrives in the global race," Mr Cameron said.

He said the scheme was a "great way to help this next generation of entrepreneurs get the financial help - and the confidence - to turn that spark of an idea into a growing, thriving business."

James Caan, panellist of the Dragons' Den BBC show and chairman of the company, said: "There has been a major shift in the way business is viewed by the public, and entrepreneurs are now seen as creative and exciting role models".

He added: "I am delighted to see that more and more young people are now looking to set up their own business."

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Many Benefits Up By 20% Since 2007, Says IDS

Welfare payouts for the jobless have risen almost twice as fast as average salaries over the last five years, according to official figures.

Out-of-work benefits have increased in value by 20% since 2007, compared to a rise of 12% in private sector pay.

Work and Pensions Secretary Iain Duncan Smith said the increases had cost the taxpayer £6.3bn since the start of the recession in 2008.

He claimed that the figures proved automatically increasing the handouts with the rate of inflation is unfair on working people.

Mr Duncan Smith said: "Working people across the country have been tightening their belts after years of pay restraint while at the same watching benefits increase. That is not fair.

"The welfare state under Labour effectively trapped thousands of families into dependency as it made no sense to give up the certainty of a benefit payment in order to go back to work.

"This government is restoring fairness to the system and Universal Credit will ensure it always pays to be in work."

The Government wants to reform the system and impose a 1% cap on most working-age benefits and tax credits for the next three years but Labour are against the move.

Iain Duncan Smith

However, the Opposition has produced its own analysis claiming that Jobseeker's Allowance (JSA) had not risen in line with wages over the past decade.

Shadow work and pensions secretary Liam Byrne said longer-term figures showed JSA had risen by 32% since 2002/3 while average earnings rose 36% over that time.

"Iain Duncan Smith has given the green light to a £14bn cut to tax credits that's pushing millions of working families into poverty and now means thousands of part-time workers are better off on benefits," he said.

"Now he wants to hit working families again with his strivers tax bill. Yet this omnishambles government thinks its right to give an average £107,000 tax cut for 8,000 millionaires," he said.

"This Tory-led government is comprehensively out of touch with the reality of Britain's working families."

Under Chancellor George Osborne's plans, child benefit, housing benefit and Universal Credit will also be capped for two years from 2014/15.

Breaking the link with inflation is predicted to save the Government almost £2.4bn by the 2015 general election and a further £11.8bn in the three years after it.

But critics say it will hit low and middle-income families and increase homelessness and hunger.

The Government is also introducing a new Universal Credit system this year, which will replace most out-of-work handouts and is aimed at making it pay to work.

The scheme will unite tax and benefits in one system and prevent total handouts exceeding the average wage.

The Government claims around three million families - mostly from the bottom of the income scale - will be better off by around £168-a-month under the changes.

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US Fiscal Cliff Averted As Bill Approved

A "fiscal cliff" of massive tax hikes and drastic spending cuts in the US has been avoided at the eleventh hour.

The House of Representatives voted to approve a bill which averts tax increases for the middle classes - and the possibility of sending the country into recession.

The bill - which also stops massive spending cuts - was approved by 257 votes to 167 after being supported earlier by the Senate.

President Barack Obama welcomed the deal and said it was just one step in a broader effort to strengthen the economy.

He said: "Thanks to the votes of Republicans and Democrats in Congress I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing tax hikes that could have sent the economy back into recession."

The vote came just hours before financial markets reopen following the New Year holiday.

Some House Republicans had wanted to amend the bill to incorporate more spending cuts, but they dropped the idea.

In the end, 172 Democrats and 85 Republicans voted in favour of the bill.

It marks a political triumph for President Obama, less than two months after he secured re-election while campaigning for higher taxes on the wealthy.

The legislation cleared the Senate hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell, veteran negotiators, sealed a deal.

The spending cuts and drastic tax increases which made up the so-called "fiscal cliff" came into effect at midnight on Monday when George W Bush-era tax cuts expired.

The deadline triggered tax increases of $536bn (£328bn) and spending cuts of $109bn (£67bn) from domestic and military programmes.

The compromise Senate deal extends the tax cuts for Americans earning under $400,000 (£246,000) - up from the $250,000 (£153,000) level Democrats had originally sought.

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Rail Fares: Call For End To Price Increases

How Much Will Your Ticket Cost?

Updated: 2:14am UK, Wednesday 02 January 2013

This is a table of rail fare rises, comparing the price of a 12-month season ticket bought in December with one bought from January 2.

The table does not include the price paid if within-London travelcards are also purchased for Tube and bus journeys in the capital.

Where London is mentioned, this means travel to London terminal stations where travel is allowed by any route option shown by the National Rail Enquiry system, Journey Planner, where the journey can be made using only one ticket.

ROUTE                          DEC 2012  JAN 2013  % RISE

Leeds-Wakefield              £908      £964            6.16%

Bishop's Stortford-London  £3,560    £3,704     4.04%

Portsmouth Harbour-London  £4,480    £4,668  4.19%

Basingstoke-London         £3,800    £3,960       4.21%

Ramsgate-London            £4,640    £4,864     4.82%

Woking-London              £2,780    £2,896        4.17%

Folkestone-London          £4,612    £4,836      4.85%

Reading-London             £3,800    £3,960       4.21%

Sevenoaks-London           £2,980    £3,112    4.43%

Aylesbury-London           £3,520    £3,632      3.18%

Bedford-London             £4,004    £4,172      4.19%

Hastings-London            £4,400    £4,584     4.18%

Canterbury-London          £4,588    £4,812    4.80%

Deal-London                £4,640    £4,864    4.82%

Dover Priory-London        £4,640    £4,864    4.82%

Ludlow-Hereford            £1,892    £1,992    5.28%

Bangor-Llandudno           £1,084    £1,140    5.16%

Morpeth-Newcastle            £960    £1,008    5%

West Malling-London        £3,712    £3,876    4.42%

Guildford-London           £3,092    £3,224    4.27%

Bracknell-London           £3,800    £3,960    4.21%

Braintree-London           £3,960    £4,124    4.14%

Tunbridge Wells-London     £3,968    £4,132    4.13%

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French Court Rejects 75% Tax Rate For Rich

French president Francois Hollande has suffered a fresh setback as the country's highest court threw out his plan to tax the ultra-wealthy at a 75% rate, saying it was unfair.

It had been one of the flagship campaign promises of Mr Hollande's election and the government has vowed to resubmit the measure.

But France's Constitutional Council ruled that the way the highly contentious tax was designed was unconstitutional.

The largely symbolic measure would have only affected a few thousand people who earned over €1m (£818,000) and brought in an estimated €100m to €300m (£82m to £245m).

But it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad, and has led to accusations that Mr Hollande is 'anti-business'.

Finance minister Pierre Moscovici said the rejection of the 75% tax and other minor measures could cut up to €500m in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3% of economic output next year.

"The rejected measures represent €300m to €500m. Our deficit-cutting path will not be affected," Mr Moscovici told BFM television.

Socialist President Hollande has his sights set on the super rich

Prime Minister Jean-Marc Ayrault said in a statement that the government would resubmit the measure to take the court's concerns into account.

The court's ruling took issue not with the size of the tax, but with the way it discriminated between households depending on how incomes were distributed among its members.

A household with two earners each making just under €1m would be exempt from the tax, while one with one earner making €1.2m would have to pay.

The French government approved the tax in its most recent budget, amid criticism by some that it would do little to stem the country's mounting fiscal problems and would drive away the wealthiest citizens.

In recent weeks, Gerard Depardieu - France's most famous actor - announced his intention to turn in his French passport and move to a village in a tax-friendly Belgium.

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Think Tank Warns Of Sluggish 'Groundhog' 2013

A think tank has warned that 2013 could turn out to be a "groundhog year" with a repeat of sluggish growth and crisis in Europe seen in 2012.

The Institute for Public Policy Research (IPPR) said that consumer and business spirits have been so thoroughly dampened by talk of years of austerity ahead that the economy mail fail to grown again this year.

In a gloomy New Year message, IPPR chief economist Tony Dolphin said the Government "still does not have a path back to growth" and appeared to be pinning hopes on "something just turning up".

The Office for Budget Responsibility's forecast of 1.2% GDP growth in 2013 and 2% in 2014 depend on a "very unlikely" readiness for hard-pressed households to drop the habits of the last four years and take on additional debt, he added.

The IPPR is calling on the Government to boost demand in the economy, pump more investment into infrastructure, establish a British Investment Bank and guarantee a minimum wage job in charity or local government for anyone unemployed for more than a year.

Mr Dolphin said: "Policy-makers appear to have little idea how to boost growth in the economy and are left hoping that the news will get better.

"The risk is that 2013 could be groundhog year for the UK economy.

"The latest forecasts suggest growth in 2013 will be weak, but better than in 2012, and that unemployment will rise.

"The risk is that they are too optimistic about growth, but that - unlike in 2012 - they are right about unemployment."

He added: "How this plays out politically will depend to some extent on what happens to unemployment.

"In 2012, the double-dip recession did less damage to the credibility of Government economic policy than it might have done because employment increased and unemployment fell by more than expected.

"The best way to describe the outlook for the UK economy is 'uncertain'."

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Last-Minute Deal Reached On US Fiscal Cliff

The US Senate has approved legislation aimed at averting the so-called fiscal cliff by stopping most tax hikes and across-the-board spending cuts that were due to begin with the New Year.

The legislation was approved with an overwhelming 89-8 vote, and came well after midnight on New Year's Day.

The House of Representatives must still approve the measure, possibly on Tuesday.

Without the legislation, economists had warned of a possible new recession and spike in unemployment.

The White House-backed legislation would prevent middle-class taxes from rising, and raise rates on incomes over $400,000 for individuals and $450,000 for couples.

It also blocks spending cuts for two months, extends unemployment benefits for the long-term jobless, prevents a 27% cut in fees for doctors who treat Medicare patients and prevents a spike in milk prices.

The deal would allow the White House and lawmakers time to regroup before plunging quickly into a new round of budget brinkmanship certain to revolve around Republican calls to rein in the cost of the Medicare health programme for the elderly and other government benefit programmes.

Vice President Joe Biden after a Senate Democratic caucus meeting on Monday

Officials also decided at the last minute to use the measure to prevent a $900 pay rise for lawmakers due to take effect this spring.

Vice President Joe Biden, who negotiated the deal with Republican Senate Majority leader Mitch McConnell, was on Capitol Hill to sell it to Democratic senators.

The tax hikes and spending cuts were due to come into force at midnight. But as global markets are closed for New Year's day, lawmakers have time to vote the deal into law.

The White House and Congressional leaders hope to send legislation to President Barack Obama within a day or two, meaning consumers shouldn't notice any impact.

Mr Obama had originally campaigned for tax hikes to kick in for those making $250,000 and above and his acceptance of a higher threshold has already angered liberals, though still represents a political victory.

The president said the deal would extend tax credits for clean energy firms and also unemployment insurance for two million people.

Both sides are already gearing up for the next legislative showdown over the need to lift the government's statutory borrowing limit of $16.4trn, which was reached on Monday.

The Treasury will now take extraordinary measures to keep the government afloat for an undisclosed period of time until the ceiling is raised. Republicans are already demanding spending cuts in return.

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French Court Rejects 75% Tax Rate For Rich

French president Francois Hollande has suffered a fresh setback as the country's highest court threw out his plan to tax the ultra-wealthy at a 75% rate, saying it was unfair.

It had been one of the flagship campaign promises of Mr Hollande's election and the government has vowed to resubmit the measure.

But France's Constitutional Council ruled that the way the highly contentious tax was designed was unconstitutional.

The largely symbolic measure would have only affected a few thousand people who earned over €1m (£818,000) and brought in an estimated €100m to €300m (£82m to £245m).

But it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad, and has led to accusations that Mr Hollande is 'anti-business'.

Finance minister Pierre Moscovici said the rejection of the 75% tax and other minor measures could cut up to €500m in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3% of economic output next year.

"The rejected measures represent €300m to €500m. Our deficit-cutting path will not be affected," Mr Moscovici told BFM television.

Socialist President Hollande has his sights set on the super rich

Prime Minister Jean-Marc Ayrault said in a statement that the government would resubmit the measure to take the court's concerns into account.

The court's ruling took issue not with the size of the tax, but with the way it discriminated between households depending on how incomes were distributed among its members.

A household with two earners each making just under €1m would be exempt from the tax, while one with one earner making €1.2m would have to pay.

The French government approved the tax in its most recent budget, amid criticism by some that it would do little to stem the country's mounting fiscal problems and would drive away the wealthiest citizens.

In recent weeks, Gerard Depardieu - France's most famous actor - announced his intention to turn in his French passport and move to a village in a tax-friendly Belgium.

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Norovirus Cruise: 'Outbreaks' On Two Ships

More than 400 passengers and crew have been sick with vomiting and diarrhoea as suspected norovirus hits two cruise ships sailing in the Caribbean.

Both luxury liners, the Queen Mary 2 and the Emerald Princess, reported the outbreak to the Centres for Disease Control, following guidelines that come into play when more than 2% of the passengers and crew are laid low.

The US public health agency said it was still conducting lab tests to determine the pathogen, but it said norovirus was suspected.

On Cunard's Queen Mary 2, which left New York on December 22 for a 10-day cruise, 194 passengers and 11 crew members of the more than 3,800 people were reported ill, the CDC said.

And on the Emerald Princess, owned by Princess Cruises, which returned to Fort Lauderdale on December 27, 189 passengers and 31 crew members of the more than 4,400 people on board fell sick, the CDC said.

The CDC said both liners had taken steps to stem the outbreak, including cleaning and disinfecting more often, as well as keeping passengers informed.

Passengers were told to avoid the buffet

But Sue Hayes, from Arkansas, said she was on the Emerald Princess and her husband fell ill. She has been critical of how the crew members handled the crisis.

"It started just a couple of days into the cruise and has affected so many that the staff can't keep up with what they have to do for those who are sick," she said on Facebook.

"I have to phone to get the room cleaned because there aren't enough staff to even get clean towels and the room stewards are not allowed to come into the room.

"I have gone and got food for him because it may be a long time to get it delivered, like two hours after scheduled."

Some people who said they were on the Queen Mary 2 said on Cruise Critic that they were advised to avoid the buffet because of the sickness and that infected passengers were being kept in their rooms.

"I have never felt as sorry for the staff as I do now. They are working round the clock battling this situation," Andiamo said on the blog.

"It is serious, but in my opinion it is being handled very well.

"The festivities continue and those of us who have avoided this virus continue to enjoy the many offerings we come to expect and appreciate.

"For those passengers who have been exposed, they are confined to their cabins until declared safe to come out."

Sky News contacted both Cunard and Princess Cruises for comment but both companies said no one was available to comment.

Similar outbreaks hit two P&O luxury liners - the Azura and the Oriana - earlier this month.

More than 200 people fell ill on the Emerald Princess

The cruise ship infections come as norovirus is thought to be behind the deaths of four people in a hospital in Japan.

The patients, aged between 80 and 97, died of breathing problems and pneumonia last week after suffering vomiting and diarrhoea, said officials at Denentoshi Hospital in Yokohama.

Almost 100 other people have been infected at the hospital since Tuesday.

Norovirus has been sweeping the UK and has led to the closure of dozens of hospital wards.

The Health Protection Agency said there could have been more than a million cases in the UK this season.

The number of cases has risen earlier than expected this year, following an as-yet unexplained trend seen across Europe and other parts of the world.

Norovirus symptoms include sudden vomiting, diarrhoea, or both, a temperature, headache and stomach cramps. The bug usually goes away within a few days but can be contagious for a couple of days after vomiting has ended.

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Fiscal Cliff: Differences Remain As Deadline Looms

Leaders in the US Senate are attempting to strike a last-minute deal to avoid huge tax hikes and spending cuts set for January 1.

Economists warn the $500bn in fiscal pain due to hit in the New Year could send the country back into recession, and destabilise the global economy in the process.

But despite feverish work behind closed doors by aides to both leaders in the Democrat-controlled Senate on Saturday a deal palatable to both sides is still elusive.

US Senate Majority Leader Harry Reid said has made a counteroffer to a Republican proposal put forward on Saturday but admitted "serious differences" remain.

The two sides have reportedly moved closer on tax increases while Republicans have indicated they could withdraw a contentious proposal to slow the growth of social security retirement benefits.

Senate Republican leader Mitch McConnell said he has asked Vice President Joe Biden to become involved in a last-minute effort to reach an agreement.

He added that there was no single issue blocking an agreement but that "the sticking point appears to be a willingness, an interest, or courage to close the deal".

"I'm willing to get this done, but I need a dance partner," Mr McConnell said.

Both the Senate and the House of Representatives would have little time to debate and then pass a deal that has eluded the White House and Congress for weeks.

Barack Obama, who called congressional leaders to the White House on Friday, addressed the crisis once more as he appeared on NBC's Sunday morning talk show Meet the Press.

Mitch McConnell and Harry Reid still heading in different directions

The President said Republicans were unwilling to see tax rates raised for the richest taxpayers.

"They say that their biggest priority is making sure that we deal with the deficit in a serious way," Mr Obama said.

"But the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected.

"That seems to be their only overriding, unifying theme," he added.

If a comprmise can be found, the two parties will then decide whether to put it to the vote on New Year's Eve in the Senate and then the Republican-controlled House of Representatives.

President Obama has pressed lawmakers to clinch a deal, even if they must reach a compromise that lacks the significant deficit-reduction measures both sides had sought.

"I was modestly optimistic yesterday, but we don't yet see an agreement," the President told NBC in the interview recorded on Saturday. "And now the pressure's on Congress to produce."

At least one senior Republican said he was optimistic of a deal, and a "political victory" for Mr Obama.

Senator Lindsey Graham told Fox News that the odds are "exceedingly good" a deal can be done.

"I don't think people want to go over the cliff," he said.

The US is facing the fiscal cliff because tax rate cuts dating back to George W Bush's presidency expire at the end of the year.

Mr Obama originally insisted on letting the tax cuts expire on households earning more than $250k (£154k) but later upped that threshold to $400k (£246k).

The pending reductions in spending, which will hit everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut America's soaring deficit.

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Fiscal Cliff: Obama 'Optimistic' After Talks

Barack Obama has called for "immediate action" to avoid the so-called fiscal cliff after urgent talks with Congressional leaders.

He urged politicians to agree a deal, saying: "The hour for immediate action is here. It is now."

He said he remained "optimistic" that an agreement could be reached to avoid millions of families being hit with big tax increases and spending cuts.

Mr Obama described the hour-long meeting with Congressional leaders as "good and constructive".

He referred to "dysfunction in Washington" and said the American public was "not going to have any patience for a politically self-inflicted wound to our economy".

Surprisingly, after weeks of post-election gridlock, Senate leaders said they hope to reach a compromise that could be presented to lawmakers by Sunday -  little more than 24 hours before the year-end deadline.

Majority leader Harry Reid and Republican leader Mitch McConnell gave a relatively upbeat assessment after what Mr McConnell called a "good" meeting with Mr Obama.

House Speaker John Boehner arrives at the White House for the talks

"I am hopeful and optimistic" of reaching a deal, Mr McConnell said.

Mr Reid promised he would be "going to do everything I can" to make a deal happen, but added: "Whatever we come up with is going to be imperfect."

House Speaker John Boehner appears for the moment to have ceded the struggle to the Senate, saying he would put any agreed bill before his chamber and let the vote proceed. 

The US is facing the fiscal cliff because tax rate cuts dating back to George W Bush's presidency expire at the end of the year.

The pending reductions in spending, which will hit everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut the US's soaring deficit.

It followed their inability to reach an agreement in 2011.

If Congress cannot agree a deal to rein in government spending, Mr Obama said Congress should allow a vote on a basic package that would keep tax cuts for middle-class Americans while extending unemployment benefits for the long-term unemployed.

The stock market was down again on Friday as the wrangling continued in Washington.

Experts say if the looming tax increases and spending cuts are not scaled back, the recovering but fragile US economy could slip back into recession.

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Hector Sants: Ex-FSA Chief Awarded Knighthood

The man tasked with regulating the City in the run-up to the near-collapse of the UK banking system has been knighted in the Queen's New Year Honours.

Former Financial Services Authority (FSA) chief executive Hector Sants has been recognised for services to financial regulation after overseeing sweeping reforms following the nationalisation of Northern Rock and the bailout of major banks.

The knighthood may be seen as a controversial decision, as it was Sir Hector who led the organisation accused by MPs of being "asleep at the wheel" in the run up to the collapse of Northern Rock.

While he was criticised for the FSA's failure to spot and prevent the credit crunch and subsequent banking meltdown, he has since won praise for cleaning up the regulator and for his role in forcing banks to beef up their balance sheets.

Sir Hector said the award was a "testament to the hard work of everyone at the FSA during the crisis, their willingness to learn lessons and to bring about the changes that were necessary".

The 56-year-old had planned to leave his role in February 2010, but was convinced by Chancellor George Osborne to stay on to see through the coalition's break-up of the FSA.

It was thought he would become a deputy governor of the Bank of England and head the Prudential Regulation Authority (PRA) - one of two new regulatory bodies that will replace the FSA as part of an overhaul in the wake of the financial crisis.

But Sir Hector unexpectedly resigned earlier this year and has courted more controversy, joining scandal-hit Barclays, where he will become the bank's first point of contact for regulators.

He is believed to be in line for a £3m pay package.

The FSA received a mauling from MPs in the wake of the banking crisis and collapse of Northern Rock.

Northern Rock had to be nationalised in 2008, with the Government also having to bail out Royal Bank of Scotland, Lloyds TSB and HBOS.

In the aftermath of the crisis, Sir Hector warned the City to "be frightened" as he pledged an era of more intrusive and direct regulation.

He also laid the blame at the door of the US and UK governments for their part in the crisis, saying authorities worldwide sought to "encourage a significant credit boom particularly for the benefit of consumers who wished to purchase housing".

Sir Hector joined the FSA wholesale markets arm from Credit Suisse in 2004. He became chief executive in 2007 - just two months before the run on Northern Rock.

It had been widely expected that Sir Hector would return to the private sector when he resigned from the FSA.

Barclays, which has had its reputation battered following this summer's rate-rigging revelations, has appointed Sir Hector to the newly-created role of head of compliance. He is due to start on January 21.

It is believed he will also play a central role in rewriting the bank's pay and bonus strategy.

Sir Hector is married with three children.

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Pig Farming Crisis To Push Up Pork Prices

By Emma Birchley, Sky News Correspondent

Supplies of British pork on shop shelves are under threat as pig farmers struggle to stay in business.

Cripplingly high feed costs caused by global wheat and soya shortages have forced many farms to close already.

The problem, according to Essex farmer Fergus Howie, is that most producers are not being paid enough by supermarkets to make a profit.

"It's unsustainable to continue farming pigs when you are losing on every single pig that you produce so pig farmers throughout the country and in Europe and America are packing up and going out of business.

"We are certainly losing about £10 a pig."

Some producers are now being offered deals that enable them to make a small profit, but many of those who are not so lucky have resorted to slaughtering more breeding sows to cut their costs.

Since mid-June an extra 15,500 sows have been slaughtered. That works out at between 3% and 4% of the total UK breeding herd.

The National Pig Association expects the result to be increased prices of bacon and sausages by the autumn.

"Because of the length of the production cycle, we won't see the impact of these numbers going out of the herd for eight to 12 months," said Zoe Davies, the NPA's general manager.

"That's when we will start to see the shortages and the prices probably creep up."

More sows are also being slaughtered across Europe which will add to the shortage of pork. And there are other changes afoot across the Channel that are likely to affect supply.

In 1999, a ban was brought in on small metal crates known as sow stalls in the UK.

Only now are similar welfare rules being brought in across EU. In theory, it should make it easier for British farmers to compete.

But Fergus Howie remains to be convinced that the law will make the difference it should.

"If is is properly implemented it will be a fair playing field but we are really worried that it won't be properly implemented and product will be coming into this country that would be illegal."

At Wicks Manor in Tolleshunt Major, the Howie family make bacon, sausages and ham from their animals and that has helped keep the farm afloat.

But for the farmers relying on a fair price for their pigs, it looks set to be another year of battling to stay in business despite prices rising on the shelves.

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